My example of risk versus reward, thoughts?
By including returns relative to risk, as measured by standard deviation an investor can view returns within the context of variability, or risk.
Imagine two people traveling 50 miles, both get there within 1 hour. Both average 50 miles an hour.
However, one travels at at variance of 40 to 60 mph and the other travels at a variance of 10 to 100 mph.
Who do you suppose has more risk?
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