1.) Which is false concerning standard deviation? a. The smaller the standard deviation is the less volatile the investment. b. A larger standard deviation means a riskier investment.​ c. Standard deviation measures the volatility of an investment from the expected losses.   2.) Which is false concerning covariance?​ a. A negative covariance means that the two variables tend to move in opposite directions, perpendicular to each other. b. A covariance of zero means there is no linear relationship between the two variables. c. A positive covariance means that the variables tend to move together .

EBK CONTEMPORARY FINANCIAL MANAGEMENT
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Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 5QTD
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1.) Which is false concerning standard deviation?

a. The smaller the standard deviation is the less volatile the investment.

b. A larger standard deviation means a riskier investment.​

c. Standard deviation measures the volatility of an investment from the expected losses.

 

2.) Which is false concerning covariance?​

a. A negative covariance means that the two variables tend to move in opposite directions, perpendicular to each other.

b. A covariance of zero means there is no linear relationship between the two variables.

c. A positive covariance means that the variables tend to move together .

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