You are considering two securities. security a has a historical average annual return of 7% and a standard deviation of 3%. security b has a historical average annual return of 7% and a standard deviation of 9%. from this information you can conclude that:

Security B is riskier than Security A.

Step-by-step 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.

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step-by-step explanation: