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Theoretical foundation of enterprise risk – risk and volatility

Modern portfolio theorists do not define risk as a likelihood of loss, but as volatility. Watch this video to find out more.

Watch the video and then summarise what you have learned.

If you ask investors what risk they assume when buying stocks, they likely will respond, “losing money.” Modern portfolio theorists do not, however, define risk as a likelihood of loss, but as volatility, which is determined using statistical measures of variance, such as standard deviation and beta.

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Enterprise Risk Management

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