The Variance of an Investment's Returns Is a Measure of The

question 117

Multiple Choice

The variance of an investment's returns is a measure of the:

• A)Volatility of the rates of return
• B)Probability of a negative return
• C)Historic return over long periods
• D)Average value of the investment

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Definitions:

Ratio Level

The highest level of measurement that describes data with a natural zero point and equal intervals, allowing for the computation of ratios.

Absolute Zero

A point on a scale where there is a complete absence of the measured phenomenon, allowing for ratio comparisons.

Ordinal Level

A measurement scale that categorizes data while preserving the order of the categories but not assuming equal intervals between them.

Order

The arrangement or sequence of elements or events in a particular way.