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You have been building a portfolio over time and wish to add one more security to increase diversity. You are trying to choose between security

  1. You have been building a portfolio over time and wish to add one more security to increase diversity. You are trying to choose between security A and security B. Given the following, which one would you prefer and why?

    a.

    Investment A because it has the highest expected return.

    b.

    Investment A because it has the lowest relative risk.

    c.

    Investment B because it has the lowest absolute risk.

    d.

    Investment B because it has the lowest coefficient of variation.

    e.

    Investment A because it has the highest coefficient of variation.

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