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You must add one of two investments to an already well- diversified portfolio. Security A Security B Expected Return = 14% Expected Return = 14%
You must add one of two investments to an already well- diversified portfolio.
Security A
Security B
Expected Return = 14%
Expected Return = 14%
Standard Deviation of Returns = 15.8%
Standard Deviation of Returns = 19.7%
Beta = 1.8
Beta = 1.5
If you are a risk-averse investor, which one is the better choice?
You must add one of two investments to an already well- diversified portfolio.
Security A | Security B |
Expected Return = 14% | Expected Return = 14% |
Standard Deviation of Returns = 15.8% | Standard Deviation of Returns = 19.7% |
Beta = 1.8 | Beta = 1.5 |
If you are a risk-averse investor, which one is the better choice?
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