Measuring Risk in Investment Portfolios

Imagine you are a portfolio manager for a wealth management firm. You are tasked with assessing the risk profile of a client’s investment portfolio, which primarily consists of equities and fixed-income securities. Your client wants to understand how the risks in their portfolio can be quantified and managed effectively.

Discuss the various measures of risk that can be used to evaluate this portfolio. Include at least two statistical measures and explain how they can inform investment decisions. Additionally, provide a brief overview of the limitations of these measures.