From 1950 to 2007, the Average Return in the Stock

Multiple Choice

From 1950 to 2007, the average return in the stock market, as measured by the S&P 500, was 13.2 percent and a standard deviation of 17 percent. Given this information, which of the following statements is correct?

A) With an average return this high, it are unlikely that an investor will lose money in the stock market in the next year or two.
B) With a standard deviation this high, it are likely that an investor will lose money in some years over a 25-year investment period.
C) This investment are not very good since the standard deviation are greater than the average return.
D) All of these statements are correct.