1. 1. 2. 3. 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.

1. 1.
1.
2.
3. 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