Which Investment Has the Least Amount of Risk

question 45

Multiple Choice

Which investment has the least amount of risk?

• A) Coefficient of variation = 8%, expected return = $800
• B) Coefficient of variation = 8%, standard deviation = $200
• C) Standard deviation = $300, expected return = $5,000
• D) Standard deviation = $100, expected return = $80

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Definitions:

Contribution Margin Ratio

The ratio of Contribution Margin to Sales Revenue, indicating the percentage of each sales dollar remaining after variable costs are deducted.

Contribution Format

An income statement format that separates fixed costs from variable costs to highlight the contribution margin.

Target Profit

The expected profit levels set by management for a specific period, guiding pricing and sales strategies.

Income Statement

An account documenting an organization's economic activity, showing income, outlays, and net gains or deficits over a distinct timeframe.