You are a portfolio manager for a large investment firm that is considering an investment in a startup technology company. The company has developed a new software application that is expected to revolutionize the industry. However, the company is not yet profitable and has a high degree of risk. Which of the following measures of risk would be most appropriate to evaluate this investment?

You are a portfolio manager for a large investment firm that is considering an investment in a startup technology company. The company has developed a new software application that is expected to revolutionize the industry. However, the company is not yet profitable and has a high degree of risk. Which of the following measures of risk would be most appropriate to evaluate this investment?

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter7: Types And Costs Of Financial Capital

Section: Chapter Questions

Problem 3EP

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You are a portfolio manager for a large investment firm that is considering an investment in a startup technology company. The company has developed a new software application that is expected to revolutionize the industry. However, the company is not yet profitable and has a high degree of risk. Which of the following measures of risk would be most appropriate to evaluate this investment?

Sharpe ratio

Standard deviation

Expected return

Beta

Definition Definition Act of managing the funds of another individual, company, or institution to maximize their wealth within a given time. Portfolio management helps to achieve financial objectives by reducing the risk of loss.

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