Asked by Lorena Edanol on Jun 07, 2024
Verified
The larger the variance, the more the actual returns tend to differ from the average return.
Variance
Variance is a statistical measurement that describes the spread of numbers in a data set, indicating how much the numbers differ from the average value.
Average Return
The mean amount of profit or loss generated by an investment over a given period.
- Gain an understanding of the statistical measures utilized in finance, such as mean, variance, and standard deviation.
- Acquire an understanding of the role standard deviation plays in investment risk assessment.
Verified Answer
AP
Alexia PeterkinJun 10, 2024
Final Answer :
True
Explanation :
Variance measures the dispersion of a set of data points around their mean value. A larger variance indicates that the data points are more spread out, meaning the actual returns are more likely to differ from the average return.
Learning Objectives
- Gain an understanding of the statistical measures utilized in finance, such as mean, variance, and standard deviation.
- Acquire an understanding of the role standard deviation plays in investment risk assessment.
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