Based on the period 1957-2005, the standard deviation:
A) Of Treasury bills was 0.0%.
B) Of Treasury bills was less than the standard deviation of large-company stocks.
C) Of large-company stocks exceeded the standard deviation of small-company stocks.
D) Of long-term bonds exceeded the standard deviation of small-company stocks.
E) Of Treasury bills exceeded the standard deviation of long-term bonds.

Question

Quizplus · Accepted Answer

The standard deviation is a measure of the amount of variation or dispersion of a set of values. Typically, stocks (including large-company stocks and small-company stocks) have higher standard deviations than more stable investments like Treasury bills and long-term bonds, reflecting their higher volatility. Therefore, the standard deviation of Treasury bills would be less than that of large-company stocks, as stocks are generally more volatile than government securities.

Based on the Period 1957-2005, the Standard Deviation