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Blittle5 Blittle5
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2 years ago
Investment A has an expected return of 8% with a standard deviation of 12%.  Investment B has an expected return of of 10% with a standard deviation 15%.

▸ Investment A should be preferred because of its lower risk.

▸ Investment B should be preferred because of its higher rate of return.

▸ Preference for A or B would depend on the investor's risk tolerance.

▸ Neither investment is acceptable because their standard deviations are greater than their expected rates of return.
Textbook 
Fundamentals of Investing

Fundamentals of Investing


Edition: 14th
Authors:
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davisdiamonddavisdiamond
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Blittle5 Author
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2 years ago
You make an excellent tutor!
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Smart ... Thanks!
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Thanks for your help!!
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