- CFA Exams
- CFA Level I Exam
- Topic 1. Quantitative Methods
- Learning Module 3. Statistical Measures of Asset Returns
- Subject 2. Measures of Dispersion
CFA Practice Question
Which of the following measures of dispersion are based on deviations from the mean?
II. Standard deviation
III. Variance
I. Mean absolute deviation
II. Standard deviation
III. Variance
A. I and III
B. II and III
C. I, II and III
Explanation: The formulas for all three measures are based on deviation from the mean. Note that variance is the standard deviation squared.
User Contributed Comments 1
| User | Comment |
|---|---|
| Xuengzilam | imagine the mean (average) is your target each data point is like a dart hitting somewhere on the board the "deviation" is how far each dart is from the target |