Averaging the Deviations from the Mean for a Portfolio of Securities

question 49

Multiple Choice

Averaging the deviations from the mean for a portfolio of securities will:

• A) compute the standard deviation.
• B) compute the variance.
• C) equal zero.
• D) equal the number of securities in the portfolio.

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Definitions:

Flexible Budget

A financial strategy that evolves in line with shifts in activity intensity or operational volume.

Budgeting Formulas

Mathematical expressions or algorithms used to calculate various components of a budget, such as expenses, revenues, or profits.

Direct Materials

Raw materials that are directly traceable to the production process and are a part of the finished product.

Flexible Budget

An adaptable financial plan that changes according to the actual output levels or activities of a business.