Which of the Following Statements Are Correct Concerning the Variance

question 65

Multiple Choice

Which of the following statements are correct concerning the variance of the annual returns on an investment?
I.The larger the variance,the more the actual returns differ from the average return.
II.The larger the variance,the larger the standard deviation.
III.The larger the variance,the greater the risk of the investment.
IV.The larger the variance,the higher the expected return.

• A)I and III only
• B)II,III,and IV only
• C)I,III,and IV only
• D)I,II,and III only
• E)I,II,III,and IV

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Definitions:

Ending Inventory Balance

The total value of all inventory held by a company at the end of an accounting period.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Overstated Costs

The reporting or recording of expenses that are higher than the actual or true costs incurred.

Inventory Costs

Inventory Costs encompass all expenses related to holding and managing inventory, including purchasing, storing, and handling costs.