Which of the Following Should Be Considered While Evaluating Various

question 32

Multiple Choice

Which of the following should be considered while evaluating various options in the decision making process?

• A) Widening the number of alternatives.
• B) Being non-judgmental while evaluating options.
• C) Assessing all options,that is,both realistic and unrealistic options.
• D) Reducing the risk factors by hypothesizing potential scenarios.

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Definitions:

Standard Deviation

A measure of the dispersion or variability of a set of values, indicating how much the values differ from the mean of the set.

Mean/Variance

Framework used in finance to assess portfolios by evaluating their expected returns against their risk, measured by variance or standard deviation.

Sharpe Ratio

A measure that indicates the average return minus the risk-free return, divided by the standard deviation of return on an investment, used to understand the return of an investment compared to its risk.

Treynor Measure

A financial metric used to assess the returns of an investment compared to its risk, specifically accounting for systematic risk with the market as a benchmark.