You must add one of two investments to an already well- diversified portfolio
Security A Security B
Expected Return = 14% Expected Return = 14%
Standard Deviation of Standard Deviation of
Returns = 15.8% Returns = 19.7%
Beta = 1.8 Beta = 1.5
If you are a risk-averse investor, which one is the better choice?
A) Security A
B) Security B
C) Either security would be acceptable.
D) Cannot be determined with information given
Answer: B) Security B
You might also like to view...
Which of the following is most likely an example of routine response behavior?
a. The purchase of a cruise vacation b. A homeowner's purchase of a new grill for $600 c. The first-time purchase of a copy machine d. The purchase of groceries
The key data in the purchasing view are
a. The purchasing organization, the goods receipt processing time, and the delivery tolerances b. The purchasing group, the goods receipt processing time, and the delivery tolerances c. The purchasing group, the invoice, and the delivery tolerances d. The purchasing group, the material master, and the delivery tolerances e. The price, the storage location, and the delivery date