Ch.10 · Benchmarks and Performance Evaluation · easy
What does a high standard deviation indicate about a mutual fund?
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EXPLANATION
A high standard deviation means the fund's returns fluctuate widely from period to period — it may deliver very high returns in some periods and very low (or negative) returns in others. While high volatility can work in an investor's favour, it also means higher downside risk. Small cap funds typically have higher standard deviation than large cap funds.
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