Use the Table for the Question(s)below

question 27

Multiple Choice

Use the table for the question(s) below.
Consider the following probability distribution of returns for Alpha Corporation:
-Which of the following statements is FALSE?

• A)We measure the degree of estimation error statistically through the standard error of the estimate.
• B)When focusing on the returns of a single security,its common practice to assume that all dividends are immediately invested at the risk-free rate.
• C)We estimate the standard deviation or volatility as the square root of the variance.
• D)We estimate the variance by computing the average squared deviation from the average realized return.

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Definitions:

Absolute Value

The distance of a number from zero on the number line, without regard to direction, represented as |x|.

Function

A correspondence between an array of inputs and a choice of outputs, with the rule that each input associates with just one output.

Speed

The rate at which an object moves, calculated as distance traveled per unit of time.

\(f ( x )\)

A symbolic representation of a function in terms of \(x\), where \(f\) denotes the function and \(x\) represents the variable.