The expected rate of return and standard deviations, respectively for four stocks are given below:
ABC 9%, 3%
CDE 11%, 9%
FGH 12%, 8%
IJK 14%, 10%
Which stock is clearly least desirable?
A)ABC
B)CDE
C)FGH
D)IJK

Question

Quizplus · Accepted Answer

CDE has a relatively high standard deviation (risk) of 9% compared to its expected return of 11%, making it less desirable compared to the other stocks which offer better risk-return trade-offs.

The Expected Rate of Return and Standard Deviations, Respectively for Four