The Average Squared Difference Between the Actual Return and the Average

question 306

Multiple Choice

The average squared difference between the actual return and the average return is the:

• A) Average return.
• B) Variance.
• C) Standard deviation.
• D) Risk premium.
• E) Excess return.

---

Definitions:

Gini Ratio

An indicator of the level of income distribution unevenness in a society, ranging from 0, which implies equal income for all, to 1, indicating one person possesses all the wealth.

Lorenz Curve

A graphical representation used to show the distribution of income or wealth within a society.

Gini Ratio

A measure of income or wealth inequality within a population, ranging from 0 (perfect equality) to 1 (maximum inequality).

Income Inequality

The unequal distribution of household or individual income across the various participants in an economy, leading to various economic and social issues.