Amanda Talks with Several Different Brokers at a Social Gathering

question 121

Multiple Choice

Amanda talks with several different brokers at a social gathering. She hears the following advice from brokers A, B, and C. Which broker, if any, gave her incorrect advice?

• A)Broker A: "There are risks in holding stocks, even in a highly diversified portfolio."
• B)Broker B: "Portfolios with smaller standard deviations have lower risk."
• C)Broker C: "Stocks with greater risks offer lower average returns."
• D)They all gave her correct advice.

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Definitions:

Standard Deviation

A measure of the dispersion of a set of data from its mean, indicating how spread out the data points are.

Standard Deviation

A statistic that quantifies the amount of variation or dispersion of a set of data values.

Sample Size

The number of individual observations or data points used in a statistical sample.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values in a dataset, indicating how spread out the values are from the mean.