Measuring Risk with Standard Deviation

As a portfolio manager, you are responsible for assessing the risk associated with an investment portfolio containing various asset classes, including equities, bonds, and real estate. In order to make informed investment decisions, you need to measure the portfolio's overall risk accurately. One common method to quantify the risk of an investment portfolio is through the calculation of standard deviation.

Standard deviation measures the amount of variation or dispersion of a set of values. For a portfolio, a higher standard deviation indicates greater volatility and uncertainty in the portfolio's returns. Suppose you are comparing two different portfolios: Portfolio A has a standard deviation of 10%, while Portfolio B has a standard deviation of 15%. Given this information, which portfolio is likely to have a higher risk profile?