If a financial asset has a historical variance of 25, then its standard deviation must be 12.5%.

Name: If a financial asset has a historical variance of 25, then its standard deviation must be 12.5%.
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Quizplus · Accepted Answer

The formula for calculating standard deviation is the square root of variance. Therefore, if the historical variance is 25, the standard deviation would be the square root of 25, which is 5. In percentage terms, it would be 20%, not 12.5%.

If a Financial Asset Has a Historical Variance of 25