Canadian Securities Course (CSC) Practice Exam · Question
Modern Portfolio Theory (MPT) suggests that investors should focus on maximizing returns for a given level of risk, or minimizing risk for a given level of return. What primary measure does MPT use to quantify the risk of a portfolio?
In MPT, standard deviation is the most common and fundamental measure used to quantify the total risk (volatility) of an individual asset or a portfolio. It rep
Start free practice for Canadian Securities Course (CSC) Practice Exam
335 questions · no signup required · 40 free questions per day
Question: Modern Portfolio Theory (MPT) suggests that investors should focus on maximizing returns for a given level of risk, or minimizing risk for a given level of return. What primary measure does MPT use to quantify the risk of a portfolio?
Answer options:
- Correlation coefficient. ✅ Standard deviation.
- Beta.
- Alpha.
Correct answer: Standard deviation.
Explanation: In MPT, standard deviation is the most common and fundamental measure used to quantify the total risk (volatility) of an individual asset or a portfolio. It represents the dispersion of returns around the average return.
Start free practice for Canadian Securities Course (CSC) Practice Exam
335 questions · no signup required · 40 free questions per day
More about Canadian Securities Course (CSC) Practice Exam
More for Canadian Securities Course (CSC) Practice Exam candidates
Ready to practice?
Free, no signup required. Build a wrong-question list as you go.
Start Free Canadian Securities Course (CSC) Practice Exam Practice →Related courses
Other Canadian certifications candidates often prepare for alongside this one.