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:

Loss on Disposal

A financial loss that occurs when the selling price of an asset is less than its carrying amount.

Revenue Account

An account that shows the income generated by a business from its normal operational activities.

Fully Depreciated

A status of a fixed asset when its book value is reduced to zero through depreciation over its useful life, assuming it has no salvage value.

Discarded

Refers to items or materials that have been thrown away or disposed of because they are no longer useful or required.