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IFSE Institute CIFC Exam - Topic 1 Question 8 Discussion

If an investor was looking for an investment with a risk equal to that of the market, which factor would she want in an investment?
D) a beta of 1
A) a beta of 0
B) a standard deviation of 1
C) a standard deviation of 0

IFSE Institute CIFC Exam - Topic 1 Question 8 Discussion

Actual exam question for IFSE Institute's CIFC exam
Question #: 8
Topic #: 1
[All CIFC Questions]

If an investor was looking for an investment with a risk equal to that of the market, which factor would she want in an investment?

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Suggested Answer: D

by Corazon at Jul 09, 2025, 01:05 AM

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Isadora
6 months ago
I thought beta was the only thing that mattered for market risk.
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Jaleesa
7 months ago
Wait, isn't a beta of 0 safer than the market?
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Viki
7 months ago
Standard deviation of 1 is also a good measure!
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Miesha
7 months ago
Totally agree, beta of 1 matches the market.
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Jacinta
7 months ago
A beta of 1 is what you want for market risk!
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Belen
8 months ago
I thought standard deviation was more about volatility, not market risk. So, I guess D makes the most sense?
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Dannette
8 months ago
I practiced a similar question, and I believe beta is the key factor here. So, I'm leaning towards D as well.
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Milly
8 months ago
I'm not entirely sure, but I remember something about beta being a measure of market risk. Could it be A instead?
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Dorothy
8 months ago
I think the answer might be D, a beta of 1, since it indicates the investment moves with the market.
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Coleen
8 months ago
Wait, is it really that simple? I'm wondering if a standard deviation of 1 might also be a valid answer, since that would indicate the same level of volatility as the overall market. I'm going to have to review my notes on this one.
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Wendell
9 months ago
Okay, I think I've got this. The question is asking about an investment with the same risk as the market, so that means a beta of 1, which is option D. Gotta love these classic risk and return questions!
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Eve
9 months ago
Hmm, I'm a bit unsure here. I know beta measures an investment's risk relative to the market, but I can't remember if a beta of 1 means the same risk or not. I'll have to think this through carefully.
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Isabella
9 months ago
This seems straightforward - if the investor wants an investment with the same risk as the market, they'd want a beta of 1, so I'll go with option D.
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Gladys
10 months ago
Ooh, a beta of 0? Sounds like a free lunch to me! Where do I sign up for that low-risk investment?
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Adaline
9 months ago
But a beta of 0 could be tempting!
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Chuck
9 months ago
A beta of 1 is what most people look for.
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Keith
9 months ago
Not realistic though, right?
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Kristofer
9 months ago
True, it matches market risk.
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Louann
10 months ago
I'm going with D. A beta of 1 is the way to go if you want an investment that matches the market's risk level.
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Tony
10 months ago
I agree, a beta of 1 is the best choice for matching the market's risk.
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Burma
11 months ago
C'mon, a standard deviation of 0? That's like saying the investment has no risk at all. That can't be the answer here.
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Na
9 months ago
B) a standard deviation of 1
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Howard
10 months ago
A) a beta of 0
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Marcos
11 months ago
I see, so the best answer would be D) a beta of 1.
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Elenor
11 months ago
That's true, but beta specifically measures market risk.
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Glenna
11 months ago
But wouldn't a standard deviation of 1 also indicate the same risk level?
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Gearldine
11 months ago
Hmm, a beta of 1 sounds about right to me. That would mean the investment's risk matches the market's, which is exactly what the question is asking for.
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Lezlie
9 months ago
User 3: Agreed, a beta of 1 would be the right choice for that.
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German
9 months ago
User 2: Yeah, that makes sense. It would mean the risk is equal to the market.
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Royal
9 months ago
User 1: I think a beta of 1 is the answer.
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Marcos
12 months ago
I agree with Elenor, a beta of 1 would match the market risk.
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Elenor
12 months ago
I think the investor would want a beta of 1.
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