Question

If a security's standard deviation is high, this indicates ALL BUT THE FOLLOWING:

A greater uncertainty of the security's return.

A greater total risk of the security.

A greater likelihood of obtaining expected returns.

A higher volatility in the security's expected returns.

All of the above are indicated by a high standard deviation of a security.

Answer 1

The correct option is E "All of the above are indicated by a high standard deviation of a security."

The Standard deviation refers to the deviation from the mean and it is a measure of total risk or uncertainity associated with the securities, A higher standard deviation leads to higher volatility and risk and lower standard deviation leads to lower volatility and risk.

The stocks with the higher standard deviation likely to give higher return over the period.

Thus, All of the above options are true