The Descriptive Measure of Dispersion That Is Based on the Concept

question 98

Multiple Choice

The descriptive measure of dispersion that is based on the concept of a deviation about the mean is

• A)the range
• B)the interquartile range
• C)both the range and the interquartile range
• D)the standard deviation

---

Definitions:

Risk Premiums

Additional returns expected by investors for taking on additional risk compared to a risk-free investment.

Risk-Free Rate

The return on an investment with no risk of financial loss, often represented by the yield on government securities like U.S. Treasury bonds.

Real Rate

The real rate is the interest rate that has been adjusted for inflation, representing the true cost of borrowing or the real yield on an investment, distinct from the nominal rate.

Expectations Theory

A theory that suggests long-term interest rates reflect the market's expectation for future short-term rates, assuming that investors have no preference for long versus short maturities.