How Can Standard Deviation, a Statistical Measure of Dispersion, Be

question 41

Essay

How can standard deviation, a statistical measure of dispersion, be used in investment analysis?

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Definitions:

Type II Error

The error that occurs when a statistical test fails to reject a false null hypothesis, also known as a "false negative" result.

Statistical Outcome

The result of any single observation or measurement regarding a statistical experiment.

Validity

The extent to which a concept, conclusion or measurement is well-founded and likely corresponds accurately to the real world.

Ordinal Data

Data that can be categorized and ranked in a specific order, but the intervals between the ranks are not necessarily equal.