R**********6 发帖数: 1 | 1 1.Why is it important to consider standard deviation, and not just the mean
(average), when deciding whether to buy a specific investment?
2.Describe the Empirical Rule. Why is the Empirical Rule important to our
understanding of an investment's behavior?
3.Suppose you are trying to decide between two investments: Investment A has
an average annual rate of return of 10% with a standard deviation of 20%.
Investment B has an average annual rate of return of 3% with a standard
deviation of 4%. Which investment would you prefer? Explain your decision by
discussing the Empirical Rule and also other factors, for example, your
appetite for risk, your short-term and long-term goals, and anything you may
already know about the financial markets. |
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