The Expected Rate of Return for 3COM Is 18 Percent

question 74

Multiple Choice

The expected rate of return for 3COM is 18 percent, with a standard deviation of 10.98 percent.The expected rate of return for Just the Fax is 26 percent with a standard deviation of 15.86%.Which firm would be considered the riskier from a total risk perspective?

• A)3COM
• B)Just the Fax
• C)Neither, both have the same risk
• D)Cannot be determined

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Definitions:

Parasympathetic

Part of the autonomic nervous system that conserves energy and resources during rest and digest states, controlling functions such as digestion and heart rate.

Autonomic Nervous System

The part of the nervous system that unconsciously controls the functions of internal organs and glands.

Rest-And-Digest

The rest-and-digest response, also known as the parasympathetic response, is a physiological reaction that decreases stress and energy expenditure by slowing the heart rate and increasing intestinal and gland activity.

Sympathetic Nervous System

Part of the autonomic nervous system that controls the body's responses to stress or emergency situations, often referred to as the "fight or flight" system.