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- Which shape has a higher standard deviation? Shape 2
- Given the area under each curve constrained by both red lines (-s, + s), which shape has
the largest area? Shape 1
- What does this area represent?
Probability of falling between the two red lines where the middle black line
crossing the bell curve in the middle is the mean average of the data that this
curve represents.
- If shapes are representations of two portfolios, which portfolio (shape) would you
prefer? why?
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