How Is the Calculation of a Variance Affected by an Observation

question 15

Multiple Choice

How is the calculation of a variance affected by an observation with a negative rate of return when other returns are positive?

• A)it reduces the variance.
• B)it increases the variance.
• C)variance is not affected by negatives or positives.
• D)the effect cannot be determined from this information.

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Definitions:

Leisure

Time available for ease and relaxation where no work is done.

Consumption Goods

Goods that are intended and consumed by individuals or households to satisfy their immediate wants and needs.

Perfect Complements

Goods that are often used together in fixed proportions, where the utility of one item increases with the usage of the other.

Wage Rate

The amount of money paid to an employee per unit of time, often per hour or day.