Final answer:
The statement is true: there are measures for the variability related to market returns, such as beta, and measures for total variability, like standard deviation of returns. Stock market performance is monitored using indices like the Dow Jones and S&P 500, which helps understand market trends.
Step-by-step explanation:
When evaluating stock performance, the statement suggests that there are measures which analyze variability solely related to market returns and also measures that examine the total variability of a stock's returns. This is indeed true. For instance, beta is a measure of the volatility, or systematic risk, of a security or a portfolio compared to the market as a whole. Total variability could mean the stock's standard deviation of returns, which captures both the systematic and unsystematic risk.
One of the common ways to measure market performance is through broad indices like the Dow Jones Industrial Average which includes 30 large U.S. companies or the Standard & Poor's 500 which follows the stock prices of 500 large U.S. companies. Over time, stocks, in general, tend to provide higher returns than bonds or savings accounts, though they carry more risk, which is evident from their higher volatility.
The performance of individual stocks and the stock market overall is gauged by looking at various indices and assessing the changes in the prices of a basket of selected stocks. This allows investors and analysts to understand market trends and the performance of specific sectors or the entire market over time.