Risk: Risk involves the chance that the actual return of an investment shall vary from the anticipated return. It includes the chances of losing either some or the entire original amount invested. The different forms of risk can be determined by determining the standard deviation of the historical returns or the average returns of a particular investment. To determine: How standard deviation relates to the general concept of risk.

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Chapter 11, Problem 4CT

Summary Introduction

Risk:

Risk involves the chance that the actual return of an investment shall vary from the anticipated return. It includes the chances of losing either some or the entire original amount invested. The different forms of risk can be determined by determining the standard deviation of the historical returns or the average returns of a particular investment.

To determine:

How standard deviation relates to the general concept of risk.

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