Which of the Following Statements About Variance Is the Most

question 77

Multiple Choice

Which of the following statements about variance is the most accurate?

• A) Variance is the square root of the standard deviation.
• B) Variance can be both, positive or negative.
• C) Variance is denominated in the same units as the original data.
• D) Variance is the average of the squared deviations from the mean.

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Definitions:

Real Option

The opportunity to undertake certain business initiatives, such as deferring, abandoning, expanding, or contracting a project, based on future events.

Underlying Asset

A financial asset or instrument upon which a derivative’s price is based, including stocks, bonds, commodities, or currencies.

Call Option

A financial contract that gives the holder the right, but not the obligation, to buy a stock or other asset at a specified price within a certain period.

Put Option

A financial contract giving the option buyer the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified timeframe.