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The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will
The expected returns, standard deviation, and coefficient variation of Stocks A and B are given below. If you are risk adverse investor, which stock will you buy?
Stocks | A | B |
Expected Return | 15% | 12% |
Std. Deviation | 4% | 3.5% |
Coefficient Variation, CV | 0.27 | 0.29 |
Stock A since expected return is higher | ||
Stock B since standard deviation is lower | ||
Stock A since coefficient variation is lower | ||
Stock B since coefficient variation is higher | ||
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