Question: Rank the following three stocks by their risk return relationship best
Rank the following three stocks by their risk-return relationship, best to worst. Night Ryder has an average return of 12 percent and standard deviation of 32 percent. The average return and standard deviation of WholeMart are 11 percent and 25 percent; and of Fruit Fly are 16 percent and 40 percent.
Relevant QuestionsYear-to-date, Oracle had earned a -1.34 percent return. During the same time period, Valero Energy earned 7.96 percent and McDonalds earned 0.88 percent. If you have a portfolio made up of 30 percent Oracle, 25 percent ...Describe how adding a risk-free security to modern portfolio theory allows investors to do better than the efficient frontier. Consider an asset that provides the same return no matter what economic state occurs. What would be the standard deviation (or risk) of this asset? Explain. Compute the expected return given these three economic states, their likelihoods, and the potential returns: You hold the positions in the following table. What is the beta of your portfolio? If you expect the market to earn 12 percent and the risk-free rate is 3.5 percent, what is the required return of the portfolio?This ...
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