Asked by Brandon Ramdeholl on May 10, 2024
Verified
Which of the following is NOT a generally accepted measure of the riskiness of an investment?
A) Standard deviation
B) Expected value
C) Variance
D) none of the above
Expected Value
A calculated average outcome of a random event, considering all possible outcomes and their probabilities.
Standard Deviation
A statistical measure that quantifies the amount of variation or dispersion of a set of data values.
- Absorb the understanding of variance and standard deviation as criteria for risk analysis.
- Distinguish between different types of risks and their measurement.
Verified Answer
RY
rekha yalavarthiMay 12, 2024
Final Answer :
B
Explanation :
Expected value is not a measure of riskiness, but rather a measure of potential return. Standard deviation and variance are both commonly used measures of riskiness, as they capture the variability of returns around the expected value.
Learning Objectives
- Absorb the understanding of variance and standard deviation as criteria for risk analysis.
- Distinguish between different types of risks and their measurement.