the expected rate of return for an investment in a start up solar energy company

Question

the expected rate of return for an investment in a start up solar energy company is 38% but the standard deviation is 12%. By contrast, the expected rate of return for an investment in an established cosmetic company with a promising new line is 22% with a standard deviation of 6% which of the following statements is FALSE? a.)Investing with the start-up solar energy company involves the most risk. b.)Investing with the start-up solar energy company has the highest rate of return. c.)Investing with the cosmetic company involves the most risk. d.)Investing with the cosmetic company has the lowest rate of return.

Explanation / Answer

following statement is FALSE:

c.)Investing with the cosmetic company involves the most risk.

=> cosmetic company's SD is 6% lower of Solar energy having SD 12%, so most risky is Solar energy.

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