Consider an asset that provides the same return no matter what economic state occurs. What would be the standard deviation of this asset?
A) Unable to answer since there is no data to calculate the standard deviation.
B) A very low number since it would have very low risk.
C) 1
D) 0

Question

Quizplus · Accepted Answer

The standard deviation measures the dispersion of a set of data points from their mean. If an asset provides the same return in every economic state, there is no dispersion from the mean, resulting in a standard deviation of 0.

Consider an Asset That Provides the Same Return No Matter