Question

A newsletter for investors recently reported that the average stock price for a blue chip stock over the past 12 months was​ $72. No standard deviation was given. Is the standard deviation more likely to be​ $6, $26, or​ $60? Explain.

Answer 1

Answer:

$6

Explanation:

The standard deviation gives an idea of the dispertion of values in those 12 month. A hight value of standard deviation means that the prices changed in big increments ( for example one month is $20, other month is $60 and other $85). If that  would be the case, is important to investors to know it and the deviation should be reported.

So, given that it isnt reported, we can say that the price vary but only a few dollars, resulting in a small standard deviation such as $6.