Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 14 percent and standard deviation of 30 percent. The average return and standard deviation of WholeMart are 12 percent and 25 percent; and of Fruit Fly are 25 percent and 40 percent.
A) Fruit Fly, Night Ryder, WholeMart
B) Night Ryder, WholeMart, Fruit Fly
C) WholeMart, Fruit Fly, Night Ryder
D) WholeMart, Night Ryder, Fruit Fly

Question

Quizplus · Accepted Answer

Total risk in stocks is best represented by their standard deviation, with a higher standard deviation indicating higher risk. Fruit Fly has the highest standard deviation (40%), followed by Night Ryder (30%), and WholeMart has the lowest (25%).

Rank the Following Three Stocks by Their Total Risk Level