The Expected Rate of Return and Standard Deviations, Respectively for Four

question 39

Multiple Choice

The expected rate of return and standard deviations, respectively for four stocks are given below:
OPQ 11%, 8%
RST 11%, 9%
UVW 12%, 10%
XYZ 12%, 8%
Which stock is clearly most desirable?

• A)OPQ
• B)RST
• C)UVW
• D)XYZ

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Definitions:

Cost Of Goods Sold

The total cost directly associated with producing the goods sold by a company, including materials and labor.

Manufactured

Refers to the state of having been made from raw materials through a process of production in a factory.

Finished Goods Inventory

The stock of completed products ready for sale, held at the end of an accounting period.

Net Income

The total earnings of a company after subtracting all expenses from revenues, including taxes and interest.