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 .
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 .
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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