Which one of the following statements is correct?
A)The standard deviation of the returns on Treasury bills is zero.
B)Large-company stocks are historically riskier than small-company stocks.
C)The variance is a means of measuring the volatility of returns on an investment.
D)A risky asset will always have a higher annual rate of return than a riskless asset.
E)There is an indirect relationship between risk and return.

Question

Quizplus · Accepted Answer

The variance is a measure of how much the returns on an investment vary from its average return, indicating the investment's volatility. Therefore, it can be used to measure risk. A higher variance indicates higher risk.

Which One of the Following Statements Is Correct