The Greatest Shortcoming of Standard Deviation as a Measure of Volatility

question 4

Multiple Choice

The greatest shortcoming of standard deviation as a measure of volatility is

• A) it discriminates in favor of investments with volatility on the "downside"
• B) it discriminates in favor of investments with volatility on the "upside"
• C) it is normally distributed meaning the possibility of an "upside" outcome is just as likely as a "downside" outcome
• D) volatility is averaged rather than incremental

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