Provide an Appropriate Response

Essay

Provide an appropriate response.
-When you invest your money in a savings account, the standard deviation of the annual return is small. When you invest your money in the stock market, the standard deviation of your annual return can be high. In which of the situations below would knowledge of the standard deviation be more important? Explain your thinking. A: A 25-year old man will invest money in a mutual fund and plans to leave his money there for a long period. B: A 63-year old man nearing retirement will invest money in a mutual fund. He will only be able to invest for a short period and will then need to withdraw his money.