GK
ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Risk of an investment
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Return of an investment
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Both (a) and (b)
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None of these
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Detailed explanation-1: -In investing, standard deviation is used as an indicator of market volatility and thus of risk. The more unpredictable the price action and the wider the range, the greater the risk.
Detailed explanation-2: -Standard deviation can be used to measure the volatility of any investment, whether it is a stock, stock fund, bond, or bond fund. As a result, standard deviation is a useful measurement of the risks of the different types of investment vehicles in your portfolio.
Detailed explanation-3: -A standard deviation (or ) is a measure of how dispersed the data is in relation to the mean. Low standard deviation means data are clustered around the mean, and high standard deviation indicates data are more spread out.
Detailed explanation-4: -Description. Standard deviation is the statistical measure of market volatility, measuring how widely prices are dispersed from the average price. If prices trade in a narrow trading range, the standard deviation will return a low value that indicates low volatility.