Data tableARate of ReturnPrintYear20162017201820192020Average(Click on the icon located on the top-rightcorner of the data table below in order to copyits contents into a spreadsheet.)20.4%2.4%B11.3%26.6%6.3%13.4%9.9%11.7%11.1%15.9%18.4%13.4%DoneI The historical returns for two investments-A and B-are summarized in the following table for the period 2016 to 2020, Use the data to answer the questionsthat follow.a. On the basis of a review of the return data, which investment appears to be more risky? Why?b. Calculate the standard deviation for each investment's returns.c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a.a. On the basis of a review of the return data, which investment appears to be more risky? Why? (Choose the best answer below.)A. The riskier investment appears to be investment B, with returns that vary widely from the average relative to investment A, whose returns show less deviationfrom the average.B. Investment A and investment B have equal risk because the average returns are the same.C. The riskier investment appears to be investment A, with returns that vary widely from the average relative to investment B, whose returns show less deviationfrom the average.D. The riskier investment appears to be investment B, with returns that are closer to the average relative to investment A, whose returns are farther from theaverage.

a.The standard deviation of returns measures the deviation from the average return on investment.…

The historical returns for two investments-A and B-are summarized in the following table for the period 2016 to 2020, Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more risky? Why? b. Calculate the standard deviation for each investment's returns. c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. C... a. On the basis of a review of the return data, which investment appears to be more risky? Why? (Choose the best answer below.) O A. The riskier investment appears to be investment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. O B. Investment A and investment B have equal risk because the average returns are the same. OC. The riskier investment appears to be investment A, with returns that vary widely from the average relative to investment B, whose returns show less deviation from the average. O D. The riskier investment appears to be investment B, with returns that are closer to the average relative to investment A, whose returns are farther from the average.

The historical returns for two investments-A and B-are summarized in the following table for the period 2016 to 2020, Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more risky? Why? b. Calculate the standard deviation for each investment's returns. c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. C... a. On the basis of a review of the return data, which investment appears to be more risky? Why? (Choose the best answer below.) O A. The riskier investment appears to be investment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. O B. Investment A and investment B have equal risk because the average returns are the same. OC. The riskier investment appears to be investment A, with returns that vary widely from the average relative to investment B, whose returns show less deviation from the average. O D. The riskier investment appears to be investment B, with returns that are closer to the average relative to investment A, whose returns are farther from the average.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 1Q

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3 9. The historical returns for two investments-A and B-are summarized in the following table for the period 2016 to 2020, Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more risky? Why? b. Calculate the standard deviation for each investment's returns. c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. Review Only Click the icon to see the Worked Solution. a. On the basis of a review of the return data, which investment appears to be more risky? Why? (Choose the best answer below.) O A. The riskier investment appears to be investment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. O B. Investment A and investment B have equal risk because the average returns are the same. O C. The riskier investment appears to be investment A, with returns…
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