A more conservative estimate of risk
by Clifford J. Sherry, Ph.D.
Risk is, or at least should be, of interest to all investors. One of the traditional measures of risk is the
standard deviation of expected returns (that is, the spread of the expected return around the mean or
average expected return). I think that there may be a better, more accurate, measure of risk, assuming that
we want to define risk in terms of dispersion
First, we need to agree on a few definitions. The first is deviation: