12-59 Using Standard Deviations,which Bank Is in a Better Position

question 16

Multiple Choice

12-59 Using standard deviations,which bank is in a better position if the average earnings on the assets of Bank A is 11 percent and Bank B is 12 percent (ignore all other factors) ?

• A)Bank B,because it earnings of 12 percent is higher than Bank A's 11 percent while,its standard deviation is lower.
• B)Bank B,because its earnings of 12 percent is higher compared to Bank A's 11 percent,while its standard deviation is higher.
• C)Bank B,because its earnings of 12 percent is higher compared to Bank A's 11 percent,while its standard deviation is the same.
• D)Bank A,because although its earnings of 11 percent is lower compared to Bank B's 12 percent,its standard deviation is significantly lower.
• E)Bank A,because although its earnings of 11 percent is lower compared to Bank A's 12 percent,its standard deviation is the same.

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