Rank the following three stocks by their level of total risk, highest to lowest.
ID: 2642043 • Letter: R
Question
Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 12 percent and standard deviation of 26 percent. The average return and standard deviation of Idol Staff are 15 percent and 30 percent; and of Poker-R-Us are 9 percent and 32 percent.
Rank the following three stocks by their level of total risk, highest to lowest. Rail Haul has an average return of 12 percent and standard deviation of 26 percent. The average return and standard deviation of Idol Staff are 15 percent and 30 percent; and of Poker-R-Us are 9 percent and 32 percent.
Explanation / Answer
The coefficient of variation is a better measure of risk, quantifying the dispersion of an asset
Stock Avg return Std deviation Variance Rank wrt risk Coefficient of Variation = Standard Deviation / Average Return Rank based on coefficient of variation Rail haul 12% 26% 7% 3 2.2 2 Idol Staff 15% 30% 9% 2 2.0 3 Poker R 9% 32% 10% 1 3.6 1Related Questions
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