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You have the following information for two hotel stocks: Investment Standard Deviation, Expected Return, E(R) Hotel Forever 10% 16% The Treasure Hotel 12% 18% Given
You have the following information for two hotel stocks:
Investment | Standard Deviation, | Expected Return, E(R) |
Hotel Forever | 10% | 16% |
The Treasure Hotel | 12% | 18% |
Given the information, which of the following statements is correct?
a. Risk averse investors invest in Hotel Forever rather than the Treasure Hotel.
b. The Treasure Hotel has a smaller correlation of variation than Hotel Forever.
c. Hotel Forever is not as good an investment as the Treasure Hotel.
d. Investing in Hotel Forever is riskier than The Treasure Hotel.
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