Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investment has an expected rate of return of 5% and a standard deviation of 2%. Which of the following rates of return is the

  1. An investment has an expected rate of return of 5% and a standard deviation of 2%. Which of the following rates of return is the most likely to occur?

10%

-1%

2%

6%

  1. Investment A has a standard deviation of 8%. Investment B has a standard deviation of 10%. Which investment has the higher level ofrisk, only considering the standard deviation?

Investment A

Investment B

They have the same risk

You can never compare risk

Step by Step Solution

3.42 Rating (155 Votes )

There are 3 Steps involved in it

Step: 1

Here is the explained answer Step 1 According to the given details An investment has an e... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Investments

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

9th Edition

73530700, 978-0073530703

More Books

Students also viewed these Accounting questions

Question

3 Explain the diff erent kinds of corporate-level strategies.

Answered: 1 week ago

Question

Describe three forms of conflict from the work of Lewin.

Answered: 1 week ago