The Standard Deviation for a Set of Stock Returns Can

question 35

Multiple Choice

The standard deviation for a set of stock returns can be calculated as the

• A)variance squared.
• B)positive square root of the variance.
• C)positive square root of the average return.
• D)average return divided by N minus one,where N is the number of returns.
• E)average squared difference between the actual return and the average return.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to substitute one product for another.

Income Effect

Economic principle that describes how a change in an individual's income affects their purchasing behavior.

Interest Rate

The percentage charged on a loan or paid on savings over a certain period of time, essentially the cost of borrowing money or the reward for saving.

Optimal Choice

The most efficient, advantageous selection or decision based on available information and constraints.