Risk Versus Return Rank the Following Three Stocks by Their

question 106

Multiple Choice

Risk versus Return 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 15 percent.The average return and standard deviation of Idol Staff are 15 percent and 25 percent; and of Poker-R-Us are 12 percent and 35 percent.

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

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Definitions:

Accounts Payable

Liabilities of a business that are owed to creditors for goods and services purchased on credit.

Currency Swap

A financial agreement to exchange principal and interest in one currency for the same in another currency.

Derivative Instrument

A financial security whose value is derived from an underlying asset, index, or interest rate, often used for hedging or speculative purposes.

Futures Contract

A legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price at a specified time in the future.