Variance Is a Measure of the Variability of Returns and Since

question 74

True/False

Variance is a measure of the variability of returns and since it involves squaring each deviation of the required return from the expected return, it is always larger than its square root, the standard deviation.

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Definitions:

Pareto Diagram

A graphical tool used for decision-making that highlights the most significant factors in a data set according to the Pareto principle.

Quality Loss Function

highlights the losses incurred by deviating from the optimal product quality level, emphasizing that loss increases as the product moves away from what is considered the target value.

Cause-and-Effect Diagram

A visual tool for identifying and organizing the potential causes of a problem in order to identify its root causes, also known as a fishbone or Ishikawa diagram.

Service Quality

The degree to which a service meets the customer's expectations, often evaluated based on factors like responsiveness, reliability, and professionalism.