A Problem with the Variance as a Measure of Risk

question 74

Multiple Choice

A problem with the variance as a measure of risk is that by squaring the individual deviations from the mean, you end up with a measure that is in squared units.To get back to the original units of measurement we commonly take the square root and obtain a risk measure known as:

• A)the confidence interval.
• B)standard deviation.
• C)co-efficient of variation.
• D)kurtosis.
• E)the root mean square.

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