Semivariance, when applied to portfolio theory, is concerned with
A) the square root of deviations from the mean.
B) all deviations below the mean.
C) all deviations above the mean.
D) all deviations.
E) the summation of the squared deviations from the mean.

Question

Quizplus · Accepted Answer

Semivariance is a measure of the dispersion of returns that focuses only on the returns below a certain threshold, typically the mean or a target rate of return. It is calculated as the average of the squared deviations of these returns from the threshold. Therefore, choice B is correct as it represents all deviations below the mean.

Semivariance, When Applied to Portfolio Theory, Is Concerned with