A measure of the tightness, or variability, of a set of returns of an investment is known as the _____.
A) correlation coefficient of the investment
B) standard deviation of the returns of the investment
C) beta of the investment
D) coefficient of variation of the investment
E) probability distribution of the returns of the investment

Question

Quizplus · Accepted Answer

The standard deviation of the returns of an investment indicates the extent to which the returns deviate from their average value. It is a measure of the tightness, or variability, of the set of returns. The other options are not measures of variability of returns, but rather measures of other characteristics of the investment.

A Measure of the Tightness, or Variability, of a Set