Reference no: EM132833989

Problem 1: your discount brokerage firm, it costs 9.95 dollars per stock trade. How much money do you need to buy 100 shares of Ralph Lauren (RL), which trades at 85.13 dollars?

a. 8,503.05 dollars.

b. 8,503.00 dollars.

c. 8,522.95 dollars.

d. 9,508.00 dollars.

Problem 2: Which of the following terms is defined as the volatility of an investment, including firm-specific risk, as well as market risk?

a. Diversifiable risk.

b. Market risk.

c. Standard deviation.

d. Total risk.

Problem 3: What is the correct ranking for the following stocks, highest to lowest, based on their total risk level?

1. Night Ryder has an average return of 15 percent and a standard deviation of 35 percent.

2. WholeMart has an average return of 13 percent and a standard deviation of 25 percent

3. Fruit Fly has an average return of 19 percent and a standard deviation of 30 percent.

a. (1) Fruit Fly, (2) Night Ryder, (3) WholeMart.

b. (1) Night Ryder, (2) WholeMart, (3) Fruit Fly.

c. (1) Night Ryder, (2) Fruit Fly, (3) WholeMart.

d. (1) WholeMart, (2) Fruit Fly, (3) Night Ryder.