Because of Differences in the Expected Returns on Different Investments

question 16

True/False

Because of differences in the expected returns on different investments, the standard deviation is not always an adequate measure of risk.However, the coefficient of variation adjusts for differences in expected returns and thus allows investors to make better comparisons of investments' stand-alone risk.

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Definitions:

Histogram

A graphical representation of the distribution of numerical data, often used to visualize the frequency of data within bins.

Observations

Data points or values collected through measurement or research in a study.

Modal Class

The category or interval in a set of data with the highest frequency, often used in analyzing categorical or grouped numerical data.

Histogram

A graphical representation of data using bars of different heights, where each bar groups numbers into ranges, showing the frequency of data within each range.