Holding the mean value of a gamble constant, the larger the standard deviation, the

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Quizplus · Accepted Answer

The standard deviation measures the amount of variability or spread of the possible outcomes of a gamble. Therefore, the larger the standard deviation, the riskier the gamble will be because there is a greater chance of extreme outcomes (both good and bad). So, option C is the best choice. Option A is incorrect because higher utility would be associated with smaller standard deviations as it reduces the risk involved. Option B is incorrect because a larger standard deviation is actually more risky. Option D is incorrect as option C is the correct answer.

Holding the Mean Value of a Gamble Constant, the Larger