Rashad Is Risk Averse and Has $3,000 with Which to Make

question 39

Multiple Choice

Rashad is risk averse and has $3,000 with which to make a financial investment. He has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option B is a low-risk stock that analysts expect to be worth about $3,307.50 in two years. Option C is a high-risk stock that is expected to be worth about $3,646.52 in four years. Rashad should choose

• A)option A.
• B)option B.
• C)option C.
• D)either A or B because they are the same to him.