With respect to the probability distribution of returns: a. high risk implies va

Question

With respect to the probability distribution of returns:

a. high risk implies variability in return such that returns in successive years are likely to be insignificantly different from one another. b. low risk implies variability in return such that returns in successive years are likely to be considerably different from one another. c. a risky stock has a higher probability of producing a return that is substantially closer to the mean of the distribution and a less risky stock has a higher probability of producing a return that is substantially away from the mean of the distribution. d. a less risky stock is likely to produce a return that is close to the mean of the distribution while a more risky stock has a higher probability of producing a return that is substantially away from the mean of the distribution.

Explanation / Answer

c. a risky stock has a higher probability of producing a return that is substantially closer to the mean of the distribution and a less risky stock has a higher probability of producing a return that is substantially away from the mean of the distribution.

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