When investing for a long horizon, investors care about the volatility of ________ returns and not the volatility of ________ returns.

Question

Quizplus · Accepted Answer

Investors with a long-term horizon are more concerned with the volatility of cumulative returns, which represent the total return over the entire investment period, rather than the volatility of average returns, which could fluctuate more in the short term but even out over the long term.

When Investing for a Long Horizon, Investors Care About the Volatility