Exam ICWIM Topic 1 Question 55 Discussion

Actual exam question for CISI's ICWIM exam
Question #: 55
Topic #: 1
You are analysing two similar funds, A and B, which have similar returns. However, you notice Fund B has a much higher standard deviation than Fund A. This implies that:

Suggested Answer: C Vote an answer

Standard deviation measures the volatility of returns. A higher standard deviation means higher risk.
* Key Concept:
* Fund A (Lower Standard Deviation) = Lower Risk.
* Fund B (Higher Standard Deviation) = Higher Risk.
* Risk-Return Tradeoff: Fund B may not necessarily be more profitable, but it is riskier.
# Reference: CFA Institute (Risk Metrics), CISI Wealth & Investment Management.

by Leif at Mar 03, 2026, 06:20 AM

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