Question

question 8
suppose you wish to invest money safely and are trying to decide between stock options in two companies. the average rates of return are the same for both companies but, one company has a much larger standard deviation of its rates of return.
which company should you invest in?
the company with the smaller standard deviation
the company with the larger standard deviation
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Explanation:

Standard deviation measures the volatility or risk. A smaller standard deviation means less variability in returns, which is safer for a risk - averse investor (since the goal is to invest safely).

Answer:

The company with the smaller standard deviation