1 1 2 3 Which is used to assess the investment performance o

Which is used to assess the investment performance of a particular financial market? O standard deviation O an index correlation reinvested profits

Solution

Standard Deviation

Standard deviation is a measure of risk that an investment will not meet the expected return in a given period. The smaller an investment\'s standard deviation, the less volatile (and hence risky) it is. The larger the standard deviation, the more dispersed those returns are and thus the riskier the investment is.

Calculate the return in $:

Capital Gains = ( 28 - 20 ) x 200 shares = $1600

Dividend gains = $0.15 x 200 shares = $30

Total Gains - Commission paid = 1600 + 30 - 35 - 35 = $1560