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Mairoon Mairoon
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6 years ago
For a given expected value, the smaller the standard deviation of the expected value, the larger the risk.
True or False? Provide an explanation.
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Microeconomics

Microeconomics


Edition: 6th
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wrote...
6 years ago
False. The smaller the standard deviation the smaller the associated risk. The standard deviation is the square root of the variance, thus the smaller the variance the smaller the standard deviation. The smaller the variance of the expected value the smaller the risk.
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