The Variance of Returns Is Computed by Dividing the Sum

question 70

Multiple Choice

The variance of returns is computed by dividing the sum of the:

• A)squared deviations by the number of returns minus one.
• B)average returns by the number of returns minus one.
• C)average returns by the number of returns plus one.
• D)squared deviations by the average rate of return.
• E)squared deviations by the number of returns plus one.

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Definitions:

Confirmation Bias

A propensity for selecting, interpreting, favoring, and recollecting data that affirms one's previously held beliefs or suppositions.

Fixation

In psychology, a persistent focus of attention or obsession on an object or subject.

Framing Effect

Describes how the presentation or framing of information can influence individuals' decisions and perceptions.

Confirmation Bias

The habit of looking for, understanding, preferring, and remembering information that validates one's existing views or theories.