Each of the Following Investments Produces the Same Rate of Return.Which

question 113

Multiple Choice

Each of the following investments produces the same rate of return.Which one has the greatest amount of risk?

• A)investment A with a standard deviation of 4%
• B)investment B with a standard deviation of 12%
• C)investment C with a standard deviation of 8%
• D)investment D with a standard deviation of 19%

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Definitions:

Liability Problem

An issue arising from being legally responsible for something, especially in terms of debts or legal penalties.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when entrusted with particular responsibilities, common in relationships such as trustee and beneficiary, or agent and principal.

Federal Government

The national government of a federated country, where powers are divided between central federal authorities and various constituent regions or states.

Principle of Ratification

The acceptance and confirmation by a principal of an act performed on their behalf by another, who didn't have the authority to act in the first place.