Economics · Risk and Return Analysis
Why is Standard Deviation preferred as a measure of risk in investment analysis?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1SD ignores extreme probabilities to give a simplified risk measure
- 2SD is solely preferred because computers calculate it easily without theoretical basis
- 3SD considers every possible outcome and assigns weight based on its probability distribution✓
- 4SD considers every possible event and assigns each event equal weightage
Correct answer
SD considers every possible outcome and assigns weight based on its probability distribution
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Economics?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Risk and Return Analysis MCQs →Want more practice questions on Risk and Return Analysis?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Economics · Risk and Return Analysis