In: Finance
The table below describes the expected return and the standard deviation of the return for Franchises A and B:
Franchise A ($MM) |
Franchise B ($MM) |
|
Expected Return |
10 |
20 |
Standard Deviation |
20 |
30 |
Franchise A is _____ Franchise B in terms of total risk.
riskier than |
||
less risky than |
||
as risky as |
||
None of the above |
Total risk is measured with SD.
The Project / Franchise with higher SD is more riskier
SD of Franchise A = 20%
SD of Franchise B = 30%
Franchise A is Less riskier than Frachise B.
Option B is correct.