Clara is looking into investing a portion of her recent bonus into the stock mar
ID: 3355685 • Letter: C
Question
Clara is looking into investing a portion of her recent bonus into the stock market. While researching different companies, she discovers the following standard deviations of one year of daily stock closing prices. Perfect Plungers Plus: standard deviation of stock prices = $ 1·17 Eye Remember Enterprises: Standard deviation of stock prices = $9.77 Based on the data and assuming these trends continue, which company would give Clara a stable long-term investment? Answer Tables Keypad Eye Remember Enterprises; the larger standard deviation indicates that Eye Remember Enterprises has less variability in its closing prices than Perfect Plungers Plus. terprises; the larger standard deviation indicates that Eye Remember Enterprises has a greater mean closing price than Perfect Plungers Plus Perfect Plungers Plus: the smaller standard deviation ndicates that Perfect Plungers Plus has a greater n closing price than Eye Remember Enterpri Submit Answer 10-52 AMExplanation / Answer
If standard deviation id greater, then the variability should be more. Also, the mean closing price is independent of standard deviation.
None of the options are correct.
It looks like a fourth option is not captured in the picture which likely is the answer.
The answer could be: Perfect Plungers Plus ; the smaller standard deviation indicates that Perfect Plungers Plus has less variability in it's closing prices than Eye Remember Enterprises.