Analyzing Investment Risk from Return Data
An investor is choosing between two assets to invest a sum of money they will need in exactly one year. Below are the annual returns for each asset over the last five years:
- Asset X: +25%, -15%, +30%, -10%, +15%
- Asset Y: +2%, +1.5%, +2.5%, +2%, +2%
Based only on this data, explain which asset represents a greater risk for this specific one-year investment horizon and why, even though it has a higher average return.
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