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Standard deviation and beta both measure risk, but they are different in that beta measures
a. both systematic and unsystematic risk.
b. only systematic risk, while standard deviation is a measure of total risk.
c. only unsystematic risk, while standard deviation is a measure of total risk.
d. both systematic and unsystematic risk, while standard deviation measures only systematic risk.
e. total risk, while standard deviation measures only nonsystematic risk.

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Kolawole845

Answer:

b) only systematic risk, while standard deviation is a measure of total risk.

Explanation:

Standard deviation is measure of the total risks of an investment. It measures the volatility in  return of an investment as a result of both systematic and non-systematic risks. Non-systematic risk includes risk that are unique to a company like poor management, legal suit against the company .

Beta on the hand measures of only systematic risk. Systematic risk is the deviation of return of an investment form the average market return due to economic-wide factors like inflation, interest rate, exchange rate e.t.c

b. only systematic risk, while standard deviation is a measure of total risk.

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