Which of the Following Statements Is FALSE

question 38

Multiple Choice

Which of the following statements is FALSE?

• A)The standard deviation is the square root of the variance.
• B)Because investors dislike only negative resolutions of uncertainty,alternative measures that focus solely on downside risk have been developed,such as the semi-variance and the expected tail loss.
• C)While the variance and the standard deviation are the most common measures of risk,they do not differentiate between upside and downside risk.
• D)While the variance and the standard deviation both measure the variability of the returns,the variance is easier to interpret because it is in the same units as the returns themselves.

---

Definitions:

Monetary Policy

The actions taken by a central bank, currency board, or other regulatory authority to control the supply of money and interest rates in an economy.

Lender Of Last Resort

An institution, usually a country's central bank, that offers loans to banks or other eligible institutions that are experiencing financial difficulty or are considered highly risky.

M1 Money Supply

The total money supply that includes cash and liquid assets that are easily convertible into cash, such as demand deposits.

Monetary Policy

Actions undertaken by a central bank, such as the Federal Reserve, to control the money supply and interest rates to achieve macroeconomic objectives like controlling inflation, consumption, growth, and liquidity.