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Finance: Standard Deviation and Investment Volatility
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Finance: Standard Deviation and Investment Volatility

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Questions and Answers

What does standard deviation measure in finance?

  • The historical volatility of an investment (correct)
  • The expected return on an investment
  • The liquidity of an investment
  • The market share of an investment
  • How is standard deviation applied in finance?

  • To shed light on the historical volatility of an investment (correct)
  • To determine the legal status of an investment
  • To calculate the trading volume of an investment
  • To predict the future returns of an investment
  • When standard deviation is applied to an investment's rate of return, what does it reveal?

  • The management style of the investment
  • The historical volatility of the investment's returns (correct)
  • The industry competition of the investment
  • The capital structure of the investment
  • What aspect of an investment does standard deviation shed light on?

    <p>Historical volatility</p> Signup and view all the answers

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