Which of the Following Statements Is False

question 10

Multiple Choice

Which of the following statements is false?

• A) The standard deviation is the square root of the variance.
• B) Because investors dislike only negative resolutions of uncertainty, alternative measures that focus solely on downside risk have been developed, such as the semi-variance and the expected tail loss.
• C) While the variance and the standard deviation are the most common measures of risk, they do not differentiate between upside and downside risk.
• D) While the variance and the standard deviation both measure the variability of the returns, the variance is easier to interpret because it is in the same units as the returns themselves.

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Definitions:

Capital

Funds or financial assets leveraged by companies to fund their operations and grow their businesses.

Profit

The earnings obtained when the income generated from business operations is higher than the expenses, costs, and taxes required for these operations.

Output Market

Marketplaces where finished goods or services are sold to consumers, as opposed to input markets where raw materials are bought.

Consumers

Individuals or entities that purchase goods or services for personal use, not for manufacture or resale.