Chartered Investment Manager (CIM) Practice Exam · Question
According to the Capital Asset Pricing Model (CAPM), what is the appropriate measure of relevant risk for an individual asset held within a well-diversified portfolio?
CAPM defines relevant risk for an individual asset within a diversified portfolio as systematic risk, which is measured by beta (β). Beta quantifies the sensiti
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
Question: According to the Capital Asset Pricing Model (CAPM), what is the appropriate measure of relevant risk for an individual asset held within a well-diversified portfolio?
Answer options: ✅ Beta (β)
- Standard deviation (σ)
- Variance (σ²)
- Coefficient of variation (CV)
Correct answer: Beta (β)
Explanation: CAPM defines relevant risk for an individual asset within a diversified portfolio as systematic risk, which is measured by beta (β). Beta quantifies the sensitivity of an asset's returns to the overall market's returns.
Start free practice for Chartered Investment Manager (CIM) Practice Exam
399 questions · no signup required · 40 free questions per day
More about Chartered Investment Manager (CIM) Practice Exam
Related Questions
- Strategic asset allocation is:
- Modern Portfolio Theory introduced by:
- A client approaches you, a CIM-credentialed portfolio manager, wanting to understand the true cost of their mu
- Duration measures bond sensitivity to:
- Which of the following is an example of an alternative investment?
- An investment advisor's foremost duty to a client is to act in their best interest, placing the client's inter
More for Chartered Investment Manager (CIM) Practice Exam candidates
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Chartered Investment Manager (CIM) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.