Question

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 larger standard deviation the company with the smaller standard deviation

Explanation:

Standard deviation measures volatility. A smaller standard - deviation means less variability in returns, which is safer for a risk - averse investor who wants to invest money safely.

Answer:

The company with the smaller standard deviation