You Would Obtain a Negative Value for the Variance If

question 18

Multiple Choice

You would obtain a negative value for the variance if

• A) all observations were at the mean.
• B) the distribution is very negatively skewed.
• C) the distribution if positively skewed.
• D) you would never obtain a negative variance.

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Definitions:

Payback Period

The duration of time it takes to recover the initial investment cost in a project or investment.

Initial Cost

The purchase price of an asset or service, including installation, setup, and training, before any depreciation or amortization.

Required Return

The minimum amount of profit an investor expects to achieve on an investment, setting the threshold for decision-making on whether to undertake the investment.

Profitability Index

An instrument in finance for assessing the attractiveness of a project or investment, which is found by dividing the current value of forthcoming cash flows by the initial cost of the investment.