Given Investments a and B with the Following Risk Return

question 28

Multiple Choice

Given investments A and B with the following risk return characteristics, which one would you prefer and why? $\begin{array}{lcc}\text { Investment } & \text { Expected Return } & \begin{array}{c}\text { Standard Deviation } \\\text { of Exp ected Returns }\end{array}\\\hline\text { A } & 12.2 \% & 7 \% \\\mathrm{~B} & 8.8 \% & 5 \%\end{array}$

• 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.

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