Question

A newsletter for investors recently reported that the average stock price for a blue chip stock over the past 12 months was $72. No standard deviation was given. Is the standard deviation more likely to be $6, S26, or $60? Explain. Choose the correct answer below. O A. The standard deviation is most likely $26, because a standard deviation of $6 would seem to indicate that the stock barely varied at all (which is unlikely in a stock market) and it is unlikely that the stock varied as much over the course of the year as a standard deviation of $60 would indicate. O B. The standard deviation is most likely $60, because a standard deviation of $6 or $26 would seem to indicate that the stock barely varied at all (which is unlikely in a stock market). O C. The standard deviation is most likely $6, because it is unlikely that the stock varied as much over the course of the year as a standard deviation of $26 or $60 would indicate

Answer 1

if the average is 72

The standard deviation is most likely $6, because it is unlikely that the stock varied as much over the course of the year as a std. dev. of $26 or $60 would indicate.

actually 3-sigma to the left of the mean will be negative values which is not possible.

Hence option C is correct