“Portfolio Risk” Please respond to the following:
Discuss the difficulties that having options in a security portfolio create for the measurement of portfolio risk. Suggest how the standard deviation statistic should be modified to account for this concern.
Analyze the circumstances where the addition of an option increases the risk of an exciting portfolio and under what circumstances it will decrease portfolio risk. Provide a specific example of each.
“Portfolio Risk” Please respond to the following:
Discuss the difficulties that having options in a security portfolio create for the measurement of portfolio risk. Suggest how the standard deviation statistic should be modified to account for this concern.
Analyze the circumstances where the addition of an option increases the risk of an exciting portfolio and under what circumstances it will decrease portfolio risk. Provide a specific example of each.
