C Vo 22 Important points: 1. If the return of two stocks is same then we will choose the stock which is less risky 2. If the risk of two stocks is same then we will choose the stock which pays higher return 3. Which one to pick: High return - high risk stock VS Low return - low risk stock? Coeffecient of Variation (CV) Martin Stock: Expected Rtn. Risk CV 10% 20% 8 Standard Deviation/Expected Return 0/^K US Electric: 8% 10% 1.25