What is the difference between semi-deviation and shortfall risk?

Correct Answer: Both risks are downside risks. They are most often used to evaluate risky investments. Semi-deviation is an alternative measurement to standard deviation or variance. Shortfall risk is the probability that the outcome will have a value less than the target return. It is the ratio of the number of observations below the target return to the total number of observations. When the target return is zero, the shortfall risk measure is commonly called the risk of loss.