Question

In: Finance

Please order the following stocks by your expectation of their total return (from highest to lowest)....

Please order the following stocks by your expectation of their total return (from highest to lowest).

(Based on what to judge the expectation of their total return?)

BAC (Bank of America)

MCD (McDonald's)

AMZN (Amazon)

CMCSA (Comcast)

UBER (Uber)

Solutions

Expert Solution

Ranking of these stocks from highest expected return to lowest expected return-

A. Amazon- I will expect the highest return out of these assets from Amazon because Amazon is having a high beta and it is in the technological space.

B. UBER- I will also expect a higher return out of over because Uber is having a very high systematic risk associated with it and it should be providing with the higher expected rate of return in order to compensate those systematic risk.

C. Comcast- I will expect Comcast to deliver a higher than moderate rate of return.

D. McDonald's- I will expect McDonald's to deliver a moderate rate of return as it is into such space which is not highly exposed to systematic risk.

E. Bank of America- I will expect the lowest possible return from Bank of America not because it has the lowest systematic risk but the ability of the financial sector has completely crippled in the current scenario.


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