Susan is planning to invest in one of four stock portfolios,and her financial advisor has given her details regarding the risk associated with each portfolio.Which of the following portfolios would you expect to have the lowest average annual rate of return?
A)A portfolio with a standard deviation of 3%.
B)A portfolio with a standard deviation of 6%.
C)A portfolio with a standard deviation of 9%.
D)A portfolio with a standard deviation of 12%.

Question

Susan is planning to invest in one of four stock portfolios,and her financial advisor has given her details regarding the risk associated with each portfolio.Which of the following portfolios would you expect to have the lowest average annual rate of return?
A)​A portfolio with a standard deviation of 3%.
B)​​​A portfolio with a standard deviation of 6%.
C)​A portfolio with a standard deviation of 9%.
D)​A portfolio with a standard deviation of 12%.

Quizplus · Accepted Answer

Generally, a lower standard deviation indicates lower risk, which is often associated with a lower average annual rate of return.

Susan Is Planning to Invest in One of Four Stock