The Variance Is the Average Squared Difference Between Which of the Following

question 63

Multiple Choice

The variance is the average squared difference between which of the following?

• A)Actual return and average return
• B)Actual return and (average return/N - 1)
• C)Actual return and the real return
• D)Average return and the standard deviation
• E)Actual return and the risk-free rate

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Definitions:

Omission Bias

The tendency to judge harmful actions as worse, or less moral, than equally harmful inactions (omissions).

Status Quo Bias

The tendency for individuals to prefer for things to stay the same by doing nothing or by sticking with a decision made previously.

Default Option

A pre-selected choice among a set of options that will be applied if no alternative is specified by the decision-maker.

Action

The act of doing something or taking steps towards achieving an outcome.