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During the Past Decade the Stock of Company a Has

Question 42

Multiple Choice

During the past decade the stock of Company A has been very stable with daily price changes staying under 1% more than 90% of the time. The stock of Company B has been less stable and daily price changes in excess of 1% tend to be observed more than 50% of the time. The standard deviation for daily price changes is higher for Company B. Based on this, we can conclude that


A) A daily return on the stock of company A is less risky
B) A daily return on the stock of company B is less risky
C) Both companies have the same level of risk about their daily stock returns
D) None of the above.

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