1.

Security A has a higher standard deviation of returns than security B. We would expect that:

1. Security A would have a risk premium equal to security B.

2. The likely range of returns for security A in any given year would be higher than the likely range of returns for security B.

3. The Sharpe ratio of A will be higher than the Sharpe ratio of B.

a. 1 only

b. 2 only

c. 2 and 3 only

d. 1, 2, and 3

2. The normal distribution is completely described by its __________.

1. mean and standard deviation
2. mean
3. mode and standard deviation
4. median and variance