Risk return characteristics
Not what you're looking for?
Given investments A and B with the following risk return characteristics, which of the following is a correct statement that is the best reason to prefer that investment, and why?
Investment A
Expected Return: 12.2%
Std Deviation of Expected Return: 7%
Investment B
Expected Return: 9.8%
Std Deviation of Expected Return: 5%
A,- it has the highest expected return
A - it has the lowest relative return
B - it has the lowest absolute return
B - it has the lowest coefficient of variation
A - it has the highest coefficient of variation
Purchase this Solution
Solution Summary
The solution explains the correct option from the given alternatives with regards to risk return characteristics.
Solution Preview
Investments should be chosen based on risk and return together and not looking at only the return or the risk. Thus the first three options we cannot take ...
Purchase this Solution
Free BrainMass Quizzes
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking
Business Processes
This quiz is intended to help business students better understand business processes, including those related to manufacturing and marketing. The questions focus on terms used to describe business processes and marketing activities.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Learning Lean
This quiz will help you understand the basic concepts of Lean.
Organizational Behavior (OB)
The organizational behavior (OB) quiz will help you better understand organizational behavior through the lens of managers including workforce diversity.