While ________ Seems to Be a Reasonable Measure of Risk

question 96

Multiple Choice

While ________ seems to be a reasonable measure of risk when evaluating a large portfolio, the ________ of an individual security does not explain the size of its average return.

• A) volatility, volatility
• B) the mean return, standard deviation
• C) mode, volatility
• D) mode, mean return

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Definitions:

SSE

Sum of Squared Errors, a measure used in statistical analysis to quantify the variation or dispersion of a set of data points.

Dependent Variable

A variable in an experiment or model whose value depends on that of others.

Independent Variable

A variable in an experiment or study that is manipulated or controlled by the researcher to investigate its effect on a dependent variable.