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 .

Financial Management: Theory & Practice

16th Edition

ISBN:9781337909730

Author:Brigham

Publisher:Brigham

Chapter25: Portfolio Theory And Asset Pricing Models

Section: Chapter Questions

Problem 3MC

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