Mollie Wise

2022-12-04

Which statement is true?
The larger the standard deviation, the higher the total risk.
The larger the standard deviation, the lower the total risk.
The standard deviation is not an indication of total risk.
None of these are correct.

rezvanifanFdT

Expert

Standard deviation represents the volatility of returns. If volatility is high, risk will be high and vice versa.
Hence, correct option is “The larger the standard deviation, the higher the total risk”.

Do you have a similar question?