Conceptual Overview: Explore how standard deviation measures the risk of an investment. For both U. S. Water (blue curve) and Martin Products (red curve) the expected return is 10%. However, the spread of possible outcomes for U. S. Water is "tighter" (i. e., closer to the expected return of 10%) than the spread for Martin Products. The depicted distributions are both normal distributions, but with different standard deviations. Use the slider at the bottom to change the standard deviation for the distribution of outcomes for Martin Products. Drag the vertical dashed line on the graph to the left or right to observe the probability of exceeding a particular rate of return.-20-15-10-50510152025303540P (Water > 0.0) = 1.00P(Martin > 0.0) = 0.84Martin Products Standard Deviation:246810sd = 101. As the standard deviation for Martin Products' distribution increases, the distribution for Martin Products:a. becomes steeper and more like the distribution for U. S. Waterb. does not changec. becomes flatter and less like the distribution for U. S. Waterd. might either become steeper or flatter

2. Use the slider to set the standard deviation for Martin Products to be 6.0. The probability of having a rate of return of at least 5% (move the cursor to 5.0)a. is greater for U. S. Water than for Martin Productsb. is the same for both U. S. Water and the Martin Products distributionc. is greater for Martin Products than U. S. Waterd. cannot be determined
3. Use the slider to set the standard deviation for the Martin Products distribution to 8.0. The probability of having a rate of return of at least 10% (move the vertical line to 10.0)a. is greater for U. S. Water than for Martin Productsb. is the same for both U. S. Water and the Martin Products distributionc. is greater for Martin Products than U. S. Waterd. cannot be determined