Rank the Following Three Stocks by Their Risk-Return Relationship, Best

question 61

Multiple Choice

Rank the following three stocks by their risk-return relationship, best to worst. Rail Haul has an average return of 10 percent and standard deviation of 19 percent. The average return and standard deviation of Idol Staff are 12 percent and 22 percent; and of Poker-R-Us are 11 percent and 25 percent.

• A) Idol Staff, Rail Haul, Poker-R-Us
• B) Rail Haul, Idol Staff, Poker-R-Us
• C) Idol Staff, Poker-R-Us, Rail Haul
• D) Poker-R-Us, Rail Haul, Idol Staff

---

Definitions:

Predatory Pricing

A competitive strategy where a firm sets very low prices with the intent to drive competitors out of the market or hinder their ability to compete.

Showrooming

The practice of examining merchandise in a traditional brick and mortar retail store without purchasing it, then shopping online to find a better deal on the same item.

Price Discrimination

A pricing strategy where identical or similar products or services are sold at different prices to different customers.

Price Fixing

An illegal agreement between parties to set prices at a certain level, preventing fair competition and manipulating the market.