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

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Definitions:

Bad Debts Expense

An expense reported on the income statement, representing the amount of accounts receivable that is not expected to be collected.

Partial Balance Sheet

A partial balance sheet presents only a section of a company's financial statements, typically focusing on either assets, liabilities, or equity at a specific point in time.

Bad Debts Expense

An expense account reflecting the cost of accounts receivable that a company does not expect to collect.