The Standard Deviation of the Returns of Stock a Is

question 10

Multiple Choice

The standard deviation of the returns of Stock A is 45.85%, and the standard deviation of the returns of Stock B is 52.7%. Which of the following statements about the stocks is correct?

• A) Stock A has less tight probability distribution, and hence lower total risk.
• B) Stock A has tighter probability distribution, and hence lower total risk.
• C) Stock B has less tight probability distribution, and hence lower total risk.
• D) Stock B has tighter probability distribution, and hence lower total risk.
• E) Stock B has lower risk, but nothing can be said about the probability distribution.

---

Definitions:

Superior Colliculi

Paired structures in the midbrain that are involved in visual and auditory reflexes and coordinate head and eye movements.

Cerebrum

The cerebrum is the largest part of the brain, responsible for higher brain functions such as thought, action, reasoning, emotion, and memory.

Inferior Colliculi

Pair of structures located in the midbrain, involved in auditory processing and acting as a major relay center for sound information.

Pyramids

Ancient massive structures with a square base and four triangular sides, mainly found in Egypt as tombs for pharaohs.