True or False: With uncertainty, measure risk using the variance and standard deviation of the expected value.

The statement is true because variance and standard deviation are key statistical measures used to assess risk in the context of uncertainty. Variance quantifies the dispersion of a set of values in relation to the expected value (mean), representing how much the values deviate from the average. This gives an indication of the risk associated with potential outcomes; higher variance means greater risk since the outcomes are spread out over a wider range.

Standard deviation, which is the square root of variance, provides a more intuitive measure of risk since it is expressed in the same units as the original data. Both of these measures allow for a quantitative assessment of risk, making them vital tools in finance, economics, and decision-making under uncertainty. By applying these concepts, one can better evaluate the risk-return profile of an investment or decision when faced with uncertainty.