Martha 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. Eye Remember Enterprises:
Standard deviation of stock prices
= $1.25 = $1.25
The Azure Travel Company:
Standard deviation of stock prices
= $9.73 = $9.73
Based on the data and assuming these trends continue, which company would give Martha a stable long-term investment?
A. The Azure Travel Company; the larger standard deviation indicates that The Azure Travel Company has less variability in its closing prices than Eye Remember Enterprises.
B. Eye Remember Enterprises; the smaller standard deviation indicates that Eye Remember Enterprises has less variability in its closing prices than The Azure Travel Company.
C. Eye Remember Enterprises; the smaller standard deviation indicates that Eye Remember Enterprises has a greater mean closing price than The Azure Travel Company.
D. The Azure Travel Company; the larger standard deviation indicates that The Azure Travel Company has a greater mean closing price than Eye Remember Enterprises.