You Must Add One of Two Investments to an Already

question 12

Multiple Choice

You must add one of two investments to an already well- diversified portfolio.

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

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Definitions:

Small Companies

Businesses with relatively small market capitalization or revenues.

Average Returns

Refers to the mean financial return of an investment over a specified period, which includes dividends, interest, and capital gains.

Standard Deviation

A statistical measure that quantifies the amount of variability or dispersion around an average.