The higher the standard deviation, the less risk the investment has.

Question

Quizplus · Accepted Answer

The higher the standard deviation, the greater the risk of the investment. Standard deviation measures the amount of variability or fluctuations in the returns of an investment. Higher standard deviation indicates the investment has a wider range of possible outcomes, which means there is a greater chance of experiencing losses or gains. Therefore, a higher standard deviation is associated with higher risk, not less risk.

The Higher the Standard Deviation, the Less Risk the Investment