Question

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. dol Staff, Rail Haul, Poker-R-Us
b. Rail Houl, Idol Staff, Poker-R-Us
c. Idol Staff, Poker-R-Us, Rail Haul
d. Poker-R-Us, Rall Haul, Idol Staff

Answer 1

The best to worst ranking based on risk-return relationship for the given stocks is Idol Staff, Rail Haul, Poker-R-Us.

Step-by-step explanation:

The stocks should be ranked by their risk-return relationship, with the best at the top and the worst at the bottom. To do this, we need to consider both the average return and the standard deviation of each stock. The higher the average return and the lower the standard deviation, the better the risk-return relationship.

Based on the given information, the best to worst ranking would be:

1. Idol Staff - with an average return of 12 percent and a standard deviation of 22 percent.
2. Rail Haul - with an average return of 10 percent and a standard deviation of 19 percent.
3. Poker-R-Us - with an average return of 11 percent and a standard deviation of 25 percent.