Which One of the Following Is Considered the Best Method

question 37

Multiple Choice

Which one of the following is considered the best method of comparing the returns on various-sized investments?

• A)total dollar return
• B)real dollar return
• C)absolute dollar return
• D)percentage return
• E)variance return

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Definitions:

Random Variable

A variable whose possible values are outcomes of a random phenomenon.

V(X + Y)

The variance of the sum of two random variables, considering both their individual variances and covariance.

V(X)

The variance of a random variable X, representing the expectation of the squared deviation of X from its mean.

V(Y)

The notation for the variance of a random variable Y, measuring the spread of its values.