Which of the following statements is (are) true about variance?Multiple select question.Variance is a measure of the squared deviations of a security's return from its expected return.Standard deviation is the square root of variance.Variance measures a security's expected return over many periods.Computation of variance requires the use of a computer.Need help? Review these concept res
Question
Which of the following statements is (are) true about variance?Multiple select question.Variance is a measure of the squared deviations of a security's return from its expected return.Standard deviation is the square root of variance.Variance measures a security's expected return over many periods.Computation of variance requires the use of a computer.Need help? Review these concept res
Solution
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"Variance is a measure of the squared deviations of a security's return from its expected return." - This statement is true. Variance is indeed a measure of how much a set of observations differs from its expected value, and it is calculated as the average of the squared differences from the mean.
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"Standard deviation is the square root of variance." - This statement is also true. Standard deviation is a measure of the amount of variation or dispersion of a set of values, and it is indeed calculated as the square root of variance.
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"Variance measures a security's expected return over many periods." - This statement is false. Variance does not measure expected return, it measures the dispersion or variability of the returns.
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"Computation of variance requires the use of a computer." - This statement is false. While a computer can certainly make the computation of variance easier, especially for large data sets, it is not strictly necessary. Variance can be calculated by hand using mathematical formulas.
Similar Questions
Which of the following statements about variance is the most accurate?Multiple ChoiceVariance is the square root of the standard deviation.Variance is the average of the squared deviations from the mean.Variance can be both, positive or negative.Variance is denominated in the same units as the original data.
Which of the following statements is true?Group of answer choicesThe sum of the deviations from each value in a data set to the mean, is always zero.The sum of the squared deviations from the mean is always zero.The standard deviation is in squared units.The standard deviation is always greater than the variance.
Which of the following is true about variance?Group of answer choicesIt measures the uncertainty of a random variableHigher variance implies low uncertainty.It is the square root of a random variable's standard deviationIt is the weighted average of all possible outcomes.
How is the standard deviation related to the variance of a data set? It is the square of the variance It is the square root of the variance It is half the variance It is twice the variance
The variance is:a. The square root of the sum of squared deviations from the meanb. The average of squared deviations from the meanc. The average of absolute deviations from the meand. The square of the standard deviation
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