Which of the Following Statements Is False

question 36

Multiple Choice

Which of the following statements is false?

• A) When an investment is risky, there are different returns it may earn.
• B) In finance, the variance of a return is also referred to as its volatility.
• C) The expected or mean return is calculated as a weighted average of the possible returns, where the weights correspond to the probabilities.
• D) The variance is a measure of how "spread out" the distribution of the return is.

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Definitions:

Intangible Benefits

Non-quantifiable advantages or value derived from a project, service, or product, such as brand recognition or customer loyalty.

Financially Attractive

A term used to describe investments or projects that are expected to yield a good financial return.

Discount Rate

The interest rate charged by central banks for lending money to commercial banks or the rate used in discounted cash flow analysis to determine the present value of future cash flows.

Project Profitability Index

A financial metric that calculates the ratio between the present value of future cash flows and the initial investment of the project.