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Jane is unsure of two possible stock investments. Both stocks have the same cost. Investment Alpha has announced a stock split of 2 for 1.

Jane is unsure of two possible stock investments. Both stocks have the same cost. Investment Alpha has announced a stock split of 2 for 1.

Investment Beta has announced a stock split of 4 for 1.

She is leaning towards Project Beta as she realizes that she will receive twice the number of shares under that investment.

She depends on you so what advice would you give her?

a.

She should forget these investments and put her money in a money market account.

b.

She should be indifferent between the two investments.

c.

She is incorrect in her assessment and Project Alpha is the better choice.

d.

She is correct in her assessment, and Project Beta is the better choice.

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