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

Question

Quizplus · Accepted Answer

The standard deviation measures the variability or spread of the possible outcomes of the gamble. Therefore, the larger the standard deviation, the greater the range of possible outcomes and the greater the risk involved in the gamble. So, C is the correct answer. A is incorrect because higher utility would result from a higher expected value, not a higher standard deviation. B is incorrect because a larger standard deviation indicates greater risk, not less. D is incorrect because one of the answers is correct.

Holding the Mean Value of a Gamble Constant,the Larger the Standard