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:

Schillings

A former unit of currency in Austria before the euro and also used in several other countries historically.

Purchasing-Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to determine exchange rates.

Dollar Appreciated

A situation where the value of the US dollar increases relative to other currencies, making foreign goods and services cheaper for Americans.

Real Exchange Rate

The rate at which two different currencies can be exchanged, taking into account their respective purchasing power.