An investment with a $500 standard deviation and a $5,000 expected value has higher risk than an investment with a $4,000 standard deviation and a $50,000 expected value.

Question

Quizplus · Accepted Answer

The standard deviation measures the risk of an investment. A higher standard deviation indicates a higher risk. In this case, the investment with a $500 standard deviation has a higher risk than the investment with a $4,000 standard deviation.

An Investment with a $500 Standard Deviation and a $5,000