Suppose it is appropriate to use a normal distribution to describe return and risk of a risky asset. The higher the standard deviation of the risky asset, the _____________:

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Answer

Lower the volatility level over a period of time.

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Lower the risk premium given a normal market.

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Narrower the bell curve and the smaller the probability ranges.Greater the probability of losing more than 50% of your investment in any one year.

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Greater the probability that the actual return for any one year will equal the average historical return.

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Narrower the bell curve and the smaller the probability ranges.

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Suppose it is appropriate to use a normal distribution to describe return and ri...

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