How does standard deviation help in measuring risk?

measuring risk with standard deviation (sd)

Level - BASIC

Knowing the average is not enough, it is also necessary to know how the actuals deviate from the average. Watch this video to learn more about the role of standard deviation in asssessing risk.

AUTHOR(S): Uma Shashikant

Explore

Measuring risk with Standard Deviation (SD)

 Knowing the average is not enough, it is also necessary to know how the actuals deviate from the average. Watch this video to learn more about the role of standard deviation in asssessing risk.

1 2 3

    1.If a fund has earned an average return of 10% over the past five years it means that



  • The return was more than 10% in each year
  • The return was less than 10% in each year
  • The return may have been less or more than 10% in the five years
  • 2.Standard deviation measures those deviations where



  • Actual is more or less than average
  • Actual is more than average
  • Actual is less than average
  • 3.Which of these investment products are likely to have the highest standard deviation of returns?



  • Bank Deposit
  • Equity Shares
  • PPF
Share :
Facebook
COMMENT :
Submit

No Comments Found