The wider the dispersion of returns on a stock, the: higher the standard deviation. lower the...
The wider the dispersion of returns on a stock, the:
higher the standard deviation.
lower the variance.
lower the real rate of return.
lower the expected rate of return.
Homework Answers
Dispersion tells about the size of the range of values that a particular variable can take. With large dispersion, a variable can take values in a wider range. Thus deviation from the mean value of the variable increases.
Since standard deviation is the measure of deviation from the mean value, therefore, the standard deviation will increase with an increase in the range of values that a variable can take.
Thus wider the dispersion higher will be the standard deviation.
Hence the first option is correct.
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