Which of the following statements is FALSE?
A) Investments with higher volatility have rewarded investors with higher average returns.
B) Investments with higher volatility should have a higher risk premium and, therefore, higher returns.
C) Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the returns of individual securities.
D) Riskier investments must offer investors higher average returns to compensate them for the extra risk they are taking on.

Question

Quizplus · Accepted Answer

C) Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios and the volatility does not explain the size of returns of individual securities.

Which of the Following Statements Is FALSE