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Basic Question 0 of 19
Which of the following statements concerning the standard deviation is not true?
B. It is the square root of the variance.
C. Given a normal distribution, there is a 68% probability that an asset's return will be within 1 standard deviation of its mean.
D. It cannot take on values less than 1.
A. It is a measure of dispersion.
B. It is the square root of the variance.
C. Given a normal distribution, there is a 68% probability that an asset's return will be within 1 standard deviation of its mean.
D. It cannot take on values less than 1.
User Contributed Comments 4
| User | Comment |
|---|---|
| danlan | Standard deviation is always positive but can be < 1. |
| surob | ...but should be >=0 |
| azramirza | danlan..i think u got the opposite...what is not true...can not take on values less than ....implies it can...:)) |
| michlam14 | remember when there is no deviation from mean SD=0 for risk free portfolio |
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
Barnes
Learning Outcome Statements
calculate and interpret the mean, variance, and covariance (or correlation) of asset returns based on historical data
calculate and interpret portfolio standard deviation
describe the effect on a portfolio's risk of investing in assets that are less than perfectly correlated
CFA® 2025 Level I Curriculum, Volume 2, Module 1.