Rank the Following Three Stocks by Their Level of Total

question 109

Multiple Choice

Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 8 percent and standard deviation of 10 percent. The average return and standard deviation of Idol Staff are 10 percent and 20 percent; and of Poker-R-Us are 6 percent and 15 percent.

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

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Definitions:

Total Tax

The combined amount of all taxes owed by an individual or corporation in a given year, including federal, state, and local taxes.

Retained Earnings

Retained earnings are the portion of a company's profits that is kept or retained within the business for reinvestment or to pay debt, rather than being distributed to shareholders as dividends.

Liability

A company's legal financial debts or obligations that arise during the course of business operations.

Dividends

Regular payments made by a corporation to its shareholders out of its profits or reserves.