Why Might Managers Find the Use of the Statistical Method

question 9

Multiple Choice

Why might managers find the use of the Statistical Method useful?

• A) It allows them to compare their performance against competitors
• B) It is the best way to present complex data
• C) It helps organise facts into useful data that can be acted upon
• D) It shows that they understand how the business works

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Definitions:

Risk

The potential for financial loss or gain in an investment due to various factors including market volatility.

Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment’s cost.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables, ranging from -1 (perfect negative correlation) to +1 (perfect positive correlation).

Expected Return

The expected return is the anticipated profit or loss from an investment over a specified period, based on historical or projected rates.