A distribution's variance and standard deviation:
A) indicates the mean or expected return.
B) measures the area under the curve.
C) shows the likelihood that an actual return will be some distance away from the expected value.
D) All of the above

Question

Quizplus · Accepted Answer

The variance and standard deviation of a distribution measure how spread out the data is from the mean or expected value. This means that they can show the likelihood that an actual return or outcome will deviate from the expected value. Option A is incorrect because the mean or expected return is not directly related to the variance or standard deviation. Option B is also incorrect because the area under the curve refers to the total probability of the distribution and is not directly related to the variance or standard deviation.

A Distribution's Variance and Standard Deviation