The _________ of an investment's return is a measure of how much the possible returns vary above and below the expected return across states of the world.Among projects with the same expected return,those with higher variance are ___________.

Question

Quizplus · Accepted Answer

The variance of an investment's return measures how much the possible returns vary above and below the expected return across states of the world. If two projects have the same expected return but one has a higher variance, it means that its potential returns are more spread out and unpredictable, making it more risky than the project with lower variance. Therefore, higher variance projects are considered more risky.

The _________ of an Investment's Return Is a Measure of How