The expected rate of return for 3COM is 18 percent, with a standard deviation of 10.98 percent.The expected rate of return for Just the Fax is 26 percent with a standard deviation of 15.86%.Which firm would be considered the riskier from a total risk perspective?
A)3COM
B)Just the Fax
C)Neither, both have the same risk
D)Cannot be determined

Question

Quizplus · Accepted Answer

3COM: v = 10.98%/18% = 0.61
Just the Fax: v = 15.86%/26% = 0.61

The Expected Rate of Return for 3COM Is 18 Percent