If you are calculating the variance and standard deviation of percentage returns on a stock, the variance will always be larger than the standard deviation.

Question

Quizplus · Accepted Answer

This statement is true. The variance is calculated by taking the sum of the squared deviations from the mean and dividing by the number of observations. Since squaring a number makes it larger, the variance will always be larger than the square root of the variance, which is the standard deviation.

If You Are Calculating the Variance and Standard Deviation of Percentage