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In finance, risk of investments may be measured by calculating the variance and standard deviation of the distribution of returns on those investments. Variance measures how far in either direction the amount of the returns may deviate from the mean.
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Why standard deviation is better measure of variance?
1. Standard deviation is not a measure of variance: it is the square root of the variance.2. The answer depends on better than WHAT!
Why is variance a poor measure of risk?
One definite drawback is that it is usually derived based on historical data and does not take into account future factors.
Why do you measure dispersion?
How do we calculate variance
What is a measure of the spread of a set of data?
The standard deviation is the value most used. Others are variance, interquartile range, or range.
What is the measure of central tendency that is least affected by extreme values?
the variance
What is used as a measure of total risk?
The standard deviation or volatility (square root of the variance) of returns.
Standard costs are used to measure?
price and quantity variance
Which is not a measure of dispersion range or variance?
Variance
Variance in the rhythm of your heart?
It is the variance in time between each heartbeat. ECG, and blood pressure tests are often used to measure the variance in the rhythm of the heart.
How do you measure the risk of a single asset?
The total risk of a single asset is measured by the standard deviation of return on asset. Standard deviation is the square root of variance. To measure variance, you must have some distribution/ possibility of asset returns. However, the relevant risk of a single asset is the systematic risk, not the total risk. Systematic risk is the risk that cannot be diversified away in a portfolio. Systematic risk of an asset is measured by the Beta. Beta can be found using Regression (between market return and asset's return) or Covariance formula.
Why standard deviation is better measure of variance?
1. Standard deviation is not a measure of variance: it is the square root of the variance.2. The answer depends on better than WHAT!
Why is variance a poor measure of risk?
One definite drawback is that it is usually derived based on historical data and does not take into account future factors.
Why do you measure dispersion?
How do we calculate variance
What does variance mean in mathematics?
A variance is a measure of how far a set of numbers is spread out around its mean.
What does Hartley's test measure?
Equal Variance
What does it mean to say that the sample variance provides an unbiased estimate of the population variance?
It means you can take a measure of the variance of the sample and expect that result to be consistent for the entire population, and the sample is a valid representation for/of the population and does not influence that measure of the population.
What is a measure of the spread of a set of data?
The standard deviation is the value most used. Others are variance, interquartile range, or range.
