Given Investments a and B with the Following Risk Return

question 44

Multiple Choice

Given investments A and B with the following risk return characteristics, which one would you prefer and why?

• A)Investment A because it has the highest expected return.
• B)Investment A because it has the lowest relative risk.
• C)Investment B because it has the lowest absolute risk.
• D)Investment B because it has the lowest coefficient of variation.
• E)Investment A because it has the highest coefficient of variation.

---

Definitions:

Mental Model Correspondence

The degree to which an individual's internal representations of the external world accurately reflect reality, enhancing understanding and decision-making.

Mental Model Accuracy

The degree to which an individual’s internal representation of the external world, including processes and relationships, matches reality.

Team Performance

A measure of how well a group accomplishes its goals and objectives, often considering factors such as efficiency, output, and cohesion.

Representational Gap

The discrepancy between the intended meaning of a message and its actual interpretation by the audience.