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) Idol Staff, Rail Haul, Poker-R-Us
B) Rail Haul, Idol Staff, Poker-R-Us
C) Idol Staff, Poker-R-Us, Rail Haul
D) Poker-R-Us, Rail Haul, Idol Staff

Question

Quizplus · Accepted Answer

The risk-return relationship is evaluated by comparing the return per unit of risk (standard deviation). Idol Staff has the highest return per unit of risk, followed by Rail Haul, and then Poker-R-Us.

Rank the Following Three Stocks by Their Risk-Return Relationship, Best