Answer:
Security B is riskier than Security A.
Explanation:
Security A and B have the same historical average annual return which is 7%, meaning that both of them have had the same results over the years.
However, the standard deviation of A is 3% and the standard deviation of B is 9%, therefore we can conclude that Security A is safer than Security B because a low standard deviation indicates that the annual returns tend to be close to the average (mean), while a high standard deviation indicates that the annual returns are spread out over a wider range of values.
For example:
Security A has this values over the years:
6, 7, 8, 7 where mean is 7.
Security B has this values over the years:
1, 13, 4, 12 where the mean is also 7.
But, A has a lower standard deviation and B a higher one, therefore, Security B is riskier.