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Because of Differences in the Expected Returns on Different Investments

question 16

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Because of differences in the expected returns on different investments, the standard deviation is not always an adequate measure of risk.However, the coefficient of variation adjusts for differences in expected returns and thus allows investors to make better comparisons of investments' stand-alone risk.


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Under the Influence

A state of being significantly affected by substances such as alcohol or drugs, usually impairing judgment or physical capabilities.

Alcohol

A psychoactive substance, specifically ethanol, commonly found in beverages like beer, wine, and spirits, and known for its effects on mood, behavior, and physical health.

Hurriedness

The state of doing something more quickly than usual, often under pressure.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, often reflecting concern about a future event.

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