Kevin Recently Received an Inheritance, and He Is Planning to Invest

question 27

Multiple Choice

Kevin recently received an inheritance, and he is planning to invest the inheritance in one of four stock portfolios. Which of these portfolios would you expect to have the highest average annual rate of return?

• A)A portfolio with a standard deviation of 5%.
• B)A portfolio with a standard deviation of 6%.
• C)A portfolio with a standard deviation of 8%.
• D)A portfolio with a standard deviation of 9%.

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Definitions:

Receiving Report

A document that records the details of goods received by a company, ensuring the quantities match the order and invoice.

Vendor's Invoice

A document issued by a vendor to a buyer indicating the products or services provided, quantities, prices, and terms of payment.

Perpetual

Continuing indefinitely without interruption; in accounting, it often refers to systems that continuously update inventory or records.

Inventory System

A method or system used to plan, organize, and control the goods or materials that are held in stock, ensuring efficient management and use of inventory.