Investments B and C Both Have the Same Standard Deviation

question 16

Multiple Choice

Investments B and C both have the same standard deviation of 20%. If the expected return on B is 15% and that of C is 18%, then the investors would

• A) Prefer B to C
• B) Prefer C to B
• C) Reject both B and C
• D) None of the above

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Definitions:

No Revenue

A situation where no sales are made or no money is earned by a business or institution.

Inventory Carrying Costs

The total cost associated with holding inventory, including warehousing, insurance, depreciation, and opportunity costs.

Straight Salary

A compensation structure where employees are paid a fixed amount of money regularly, regardless of performance.

Commission

A form of payment to an employee or agent, typically a percentage of the value of the goods or services they have sold.