Raw Returns Are Not Particularly Useful When Making Investment Decisions

question 81

Multiple Choice

Raw returns are not particularly useful when making investment decisions because they

• A) Are the expected returns only
• B) Ignore inflation
• C) Are adjusted for total risk rather than just systematic risk
• D) Are based on a tentative beta
• E) Ignore risk

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Definitions:

Accuracy Level

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or standard.

Sample Size

The number of observations or individuals taken from a population for the purpose of statistical analysis.

Sample Proportion

The sample proportion is a statistic that estimates the proportion of elements in a sample that have a particular attribute, characteristic, or outcome.

Acceptable Error

The margin of error or deviation from a standard value that is deemed tolerable within specific contexts, such as measurements or quality control.