The standard deviation of small-company stocks:
A)had an average value of about 20 percent for the period 1926 to 2017.
B)is roughly equivalent to the standard deviation on stocks of all sizes.
C)is about ten times as large as the standard deviation of U.S.Treasury bills.
D)is less than the standard deviation on large-company stocks.
E)produces a narrow normal distribution curve.

Question

Quizplus · Accepted Answer

Small-company stocks have higher volatility and risk than larger stocks, therefore the standard deviation is larger. The standard deviation of U.S. Treasury bills is low due to their low risk, thus the standard deviation of small-company stocks is about ten times as large as the standard deviation of U.S. Treasury bills.

The Standard Deviation of Small-Company Stocks