The standard deviation of the returns of Stock A is 45.85%, and the standard deviation of the returns of Stock B is 52.7%. Which of the following statements about the stocks is correct?
A. ?Stock A has less tight probability distribution, and hence lower total risk.
B. ?Stock A has tighter probability distribution, and hence lower total risk.
C. ?Stock B has less tight probability distribution, and hence lower total risk.
D. ?Stock B has tighter probability distribution, and hence lower total risk.
E. ?Stock B has lower risk, but nothing can be said about the probability distribution.
Answer: B
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