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Consider two assets, A and B, with the following equally likely rates of return: A will return either 3%, 6%, or 3.5%. B will return
Consider two assets, A and B, with the following equally likely rates of return: A will return either 3%, 6%, or 3.5%. B will return either 2.5%, 8%, or 7.5. Asset A 3.0% 6.0% 3.5% Asset B 2.5% 8.0% 7.5% Find the expected rates of return for assets A and B. Which asset would an investor, who cares only about expected return and risk and can choose only one or the other, prefer?
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