Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 12 percent and a standard deviation of 33 percent. The average return and standard deviation of WholeMart are 13 percent and 40 percent, and Fruit Fly is 18 percent and 35 percent. RankStock1 2 3

Question
Asked Nov 3, 2019

Rank the following three stocks by their total risk level, highest to lowest. Night Ryder has an average return of 12 percent and a standard deviation of 33 percent. The average return and standard deviation of WholeMart are 13 percent and 40 percent, and Fruit Fly is 18 percent and 35 percent.

 
Rank Stock
1  
2  
3  
check_circleExpert Solution
Step 1

Calculation of the Total Risk Level of Night Ryder Stocks, WholeMart Stocks and Fruit Fly Stocks using excel is as follows:

A
B
Average
Standard
Stocks
Total Risk
Return
2 Night Ryder0.12
0.13
0.18
Deviation
0.33
0.4
0.35
1
=B2 C2
=B3 C3
=B4*C4
3WholeMart
4 Fruit Fly
help_outline

Image Transcriptionclose

A B Average Standard Stocks Total Risk Return 2 Night Ryder0.12 0.13 0.18 Deviation 0.33 0.4 0.35 1 =B2 C2 =B3 C3 =B4*C4 3WholeMart 4 Fruit Fly

fullscreen
Step 2

The result of above tabl...

A
В
C
Average
Standard
Total Risk
Stocks
Return
Deviation
1
2 Night Ryder
12%
33%
3.96%
3 WholeMart
13%
40%
5.20%
4 Fruit Fly
18%
35%
6.30%
help_outline

Image Transcriptionclose

A В C Average Standard Total Risk Stocks Return Deviation 1 2 Night Ryder 12% 33% 3.96% 3 WholeMart 13% 40% 5.20% 4 Fruit Fly 18% 35% 6.30%

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour*

See Solution
*Response times may vary by subject and question
Tagged in

Business

Finance

Related Finance Q&A

Find answers to questions asked by student like you

Show more Q&A add
question_answer

Q: Jaime found a 3 bedroom house for sale. Listing price is $275,000. He placed a bid of $260,000 on th...

A: The buyer should think of various scenarios to the prevailing market conditionsFirst, he needs to de...

question_answer

Q: What mortgage would result in a higher payment? Mortgage A  $985 a month for 30 years or Mortgage B ...

A: Click to see the answer

question_answer

Q: discuss the rationale behind the introduction of negative interest rate policies across economies wo...

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any spec...

question_answer

Q: You want to endow a scholarship that will pay $11,000 per year forever, starting one year from now. ...

A: Framework:If P is the perpetuity and r is the discount rate, then PV of a perpetuity = P / rAmount t...

question_answer

Q: Josh borrowed $500 for 1 year and paid $50 in interest. The bank charged a $5 service charge. What i...

A: Finance charge:Finance charge means the total amount of charges of loan and interest paid throughout...

question_answer

Q: Suppose that 10 years ago you bought a home for $150,000, paying 10% as a down payment, and financin...

A: Computation of the equity:Hence, the equity is $91,752.

question_answer

Q: An investor has a portfolio of two securities, a stock with a beta of 1.24 and a risk-free asset. Th...

A: Suppose the weight of the stock in the portfolio be x, then the weight of the risk free asset in the...

question_answer

Q: 10 &ercent Suppose that you earned a bachelor's degree and now you' re teaching middle school. The s...

A: $1500 is deposited every three months for a period of 11 years at a rate of 5.5% compounded quarterl...

question_answer

Q: Executives at Microsoft are interested to get into the drone delivery business. Since it would take ...

A: (a) Calculation of present values of two options:Answer:Net present values of both options are $40 m...