If you were to use the standard deviation as a measure of investment risk,which of the following has historically been the highest risk investment?
A) Common stock of large firms
B) U.S. Treasury bills
C) Common stock of small firms
D) Long-term government bonds

Question

Quizplus · Accepted Answer

Common stock of small firms has historically had the highest standard deviation (and therefore the highest risk) among the options listed. Large firm common stock and long-term government bonds have typically had lower standard deviations, while U.S. Treasury bills have had the lowest standard deviation.

If You Were to Use the Standard Deviation as a Measure