A Measure of the Tightness, or Variability, of a Set

question 18

Multiple Choice

A measure of the tightness, or variability, of a set of returns of an investment is known as the _____.

• A) correlation coefficient of the investment
• B) standard deviation of the returns of the investment
• C) beta of the investment
• D) coefficient of variation of the investment
• E) probability distribution of the returns of the investment

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Definitions:

Exchange Gain

Exchange gain arises when a company holds foreign currency or transactions, and the exchange rate moves in its favor, increasing the value of the foreign currency held.

Loss

A decrease in net assets or wealth, often realized when expenses exceed revenues or when assets lose value and is reflected in the financial statements.

Forward Exchange Contract

A financial contract between parties to exchange currencies at a predetermined rate on a specified future date.

Contractual Obligation

A duty or commitment that is legally enforceable due to a contract agreement.