A stock with larger standard deviations of returns has higher risk than a stock with lower standard deviations.

Question

Quizplus · Accepted Answer

Standard deviation is a measure of how much the returns of a stock deviate from its average. A larger standard deviation indicates that the stock's returns are more spread out, which means there is a higher variability in the returns. This variability increases the uncertainty of future returns and implies higher risk. Therefore, a stock with larger standard deviations of returns has a higher risk than a stock with lower standard deviations.

A Stock with Larger Standard Deviations of Returns Has Higher