Which of the Following Statements About the Standard Deviation Are

question 109

Multiple Choice

Which of the following statements about the standard deviation are correct?
I. The standard deviation is a measure of relative dispersion.
II. Standard deviations should be in considered in conjunction with expected returns to compare investments.
III. The standard deviation is calculated by taking the square root of the variance.
IV. The higher the standard deviation of an investment, the lower its risk.

• A) I and IV only
• B) II and III only
• C) I, III and IV only
• D) I, II and III only

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Definitions:

Pure Monopoly

A market structure characterized by a single seller facing no competition, possessing the power to control prices and market supply.

Differentiated Products

Products that are distinct from one another on the basis of quality, design, branding, or other features that are not purely based on price.

Economic Profits

The surplus achieved when a firm's revenue exceeds all its costs, incorporating both opportunity costs and explicit costs, measured over time.

Optimal Productive Efficiency

The state in which an economy or production operation can produce the maximum output with the given resources and technology, without wasting resources.