Consider the following variances of different stocks all with the same expected returns.Which stock represents the riskiest choice?

Question

Quizplus · Accepted Answer

Standard deviation or variance measures the dispersion of returns from the expected value. The higher the variance or standard deviation, the riskier the investment. Among the given options, stock B has the highest variance of 0.25, indicating the highest risk. Therefore, it is the riskiest choice. The other stocks have lower variances, and hence, lower risks.

Consider the Following Variances of Different Stocks All with the Same