Which of the Following Statements Is FALSE

question 40

Multiple Choice

Which of the following statements is FALSE?

• A)The variance increases with the magnitude of the deviations from the mean.
• B)The variance is the expected squared deviation from the mean.
• C)Two common measures of the risk of a probability distribution are its variance and standard deviation.
• D)If the return is riskless and never deviates from its mean,the variance is equal to one.

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Definitions:

Least Squares Line

A straight line that minimizes the sum of the squares of the vertical distances of the points from the line.

Y-intercept

The point where a line or curve crosses the y-axis of a graph, representing the value when all independent variables are zero.

Least Squares Line

A line that minimizes the sum of the squares of the vertical deviations from each data point to the line, often used in linear regression.

Interval Variables

Variables where the intervals between the values are interpretable, allowing for meaningful comparison and arithmetic operations.