Question: Volatility is measured by variance or standard deviation in Statistics. Why is beta the risk measure in CAPM, rather than variance of the portfolio?

Volatility is measured by variance or standard deviation in Statistics. Why is beta the risk measure in CAPM, rather than variance of the portfolio?

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To understand why beta is used as the risk measure in the Capital Asset Pricing Model CAPM rather than the variance of the portfolio lets break it dow... View full answer

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