Question
Consider the return distributions for two stocks below. Both investments have the same average return represented by the black line running through the center of
Consider the return distributions for two stocks below. Both investments have the same average return represented by the black line running through the center of the distributions. Which statement below is CORRECT?
Group of answer choices
Since the average return is the same for both stocks, the risk for each stock is the same.
Because there is less variability in returns relative to its average, Stock B is the less risky of the two securities.
The large dispersion around the average return implies that stock B involves greater risk because the investor can be less certain of the stocks return.
Because there is more variability in returns relative to its average, Stock A is the riskier of the two securities.
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