Range as a risk measure leaves the picture incomplete because:
A)it cannot distinguish in riskiness between two distributions of situations where the possible outcomes are bounded.
B)it does not take into account the frequency or probability of the extreme values.
C)it measures the frequency of distribution and ignores the severity.
D)it measures the extreme values of the distribution with the probability of its occurrence.
E)it measures the severity of distribution and ignores the frequency.

Question

Quizplus · Accepted Answer

Range as a risk measure only considers the difference between the maximum and minimum values of a distribution, ignoring how often or how likely these extreme values are to occur. This means it does not account for the frequency or probability of these values, which is crucial for a comprehensive understanding of risk.

Range as a Risk Measure Leaves the Picture Incomplete Because