BBS/BBA/MBS Exam Notes

Statistical Measurement of Risk: What is Variance, Standard Deviation & Coefficient of Variation?

Statistical measurement of risk The Mean-Variance Framework The Markowitz approach, while powerful and simple, boils investor choices down to two dimensions. The “good” dimension is captured in the expected return on an investment, and the “bad” dimension is the variance or volatility in that return. In effect, the approach assumes that all risk is captured […]