Financial Risk Manager Part 1

Explanation

Measures of variability (also called measures of dispersion) describe how spread out or scattered the data points are in a dataset. The key measures of variability include:

1. Variance - Measures the average squared deviation from the mean
2. Standard deviation - The square root of variance, expressed in the same units as the data
3. Range - The difference between the maximum and minimum values
4. Interquartile range (IQR) - The range between the 25th and 75th percentiles
5. Mean absolute deviation - Average absolute deviation from the mean

Median, on the other hand, is a measure of central tendency, not variability. Measures of central tendency describe the center or typical value of a dataset and include:

• Mean (average)
• Median (middle value)
• Mode (most frequent value)

The question asks for the measure that is NOT a measure of variability, and among the options, only Median belongs to the category of central tendency measures, making it the correct answer.