Which of the Following Statements Is FALSE

question 38

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:

Working Capital Decision

The process of managing the short-term assets and liabilities of a firm to ensure it operates efficiently and can meet its obligations.

Capital Expenditure

Funds spent by a company to acquire, upgrade, and maintain physical assets such as property, industrial buildings, or equipment.

Working Capital Management

Planning and managing the firm’s current assets and liabilities.

Inventory

Raw materials, work-in-progress, and finished goods that are considered assets and intended for sale in the ordinary course of business.