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 =$1.13 Eye Remember Enterprises: Standard deviation of stock prices =$9.72 Based on the data and assuming these trends continue, which company would give Clara a stable long-term investment?

Answer 1

Perfect Plungers Plus would give Clara a stable long-term investment.

Step-by-step explanation:

The standard deviation of a stock's closing prices is a measure of how much the prices fluctuate over time. A lower standard deviation indicates a more stable investment.

Based on the given data, Perfect Plungers Plus has a standard deviation of $1.13, while Eye Remember Enterprises has a standard deviation of $9.72. Therefore, Perfect Plungers Plus would give Clara a more stable long-term investment.

This means that the stock prices of Perfect Plungers Plus are likely to change less compared to Eye Remember Enterprises.