Standard deviation is a measure of how each possible outcome deviates from the expected value. In this context, which of the following statements is correct?

CS Executive · Financial and Strategic Management · PYQS · June 2022
Standard deviation is a measure of how each possible outcome deviates from the expected value. In this context, which of the following statements is correct?
(A) The higher is the value of deviation, the lower is the risk associated with portfolio
(B) The lower is the value of deviation, the lower is the risk associated with portfolio
(C) Value of deviation has nothing to do with portfolio risk
(D) None of the above

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Financial Management

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