Question

Measure of dispersion are often used in finance as a proxy for risk.explain

Answer 1

Answer:

finance, dispersion describes a range of possible returns for an investment. It is a way to measure the riskiness of an investment. ... Measuring this type of risk will require estimates or figures for expected return on the investment, probabilities for the expected returns, and standard deviations.

Answer 2

The measure of dispersion are often used in finance as a proxy for risk for a particular investment or security portfolio. It measures the degree of risk or uncertainty that is associated with a certain investment.

Explanation:

• Dispersion is a statistical term that is used for giving a perspective for a particular investment. Since the investors have many kinds of securities to invest in and many factors to consider in choosing where to invest.
• Dispersion can be measured through various forms of  statistics like standard deviation and  variance.
• Dispersion in finance and investment is used to measure the risk and uncertainty in regards to the range of possible returns on investment. The return on investment shows the uncertainty or risk associated with it.

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