What is a common measure of investment risk?

Standard deviation is a widely recognized measure of investment risk because it quantifies the degree of variation or dispersion of a set of data points from their mean (average). In the context of investments, it is used to assess the volatility of an asset's returns. A higher standard deviation indicates greater variability in returns, which typically corresponds to a higher level of risk. Investors use this measure to understand how much an investment's return can fluctuate over time, and thus makes it easier to compare the risk levels of different investments.

Return on Equity is more focused on measuring a company's profitability relative to shareholders' equity, rather than assessing risk. Similarly, the Price-to-Earnings ratio helps in evaluating the valuation of a company, but it does not provide a direct measure of investment risk. The Current ratio is a liquidity measure to assess a company's ability to cover short-term obligations, which again does not pertain to investment risk. Therefore, standard deviation stands out as the appropriate metric to evaluate investment risk among the options provided.