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What is the appropriate measure of risk of a financial security?

In this video, Prof Pasquale Scaramozzino explores the concept of covariance, and how it applies to measuring levels of risk in a financial security.

The key idea in portfolio analysis is that when investors are trying to establish the value of their wealth, they must consider their assets as a whole. This also offers the key to measuring their risk.

In this video, Prof Pasquale Scaramozzino outlines how the risk of an asset should not be measured by its own variability, but rather by how it contributes to the variability of the whole portfolio.

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Risk Management in the Global Economy

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