Selection of expected return by rational investor

Reference no: EM1355654

Investment A has an expected return of 15% per year, while investment B has an expected return of 12% per year. A rational investor will choose:

A) investment A if A and B are of equal risk.
B) investment B because a lower return means lower risk.
C) investment A because of the higher expected return.
D) investment A only if the standard deviation of returns for A is higher than the standard deviation of returns for B.

Reference no: EM1355654

Questions Cloud

Calculate expected dividends worth : Suppose you are planning to buy of Lokin, Inc. The firm just paid a dividend of $4.20 per share. The stock is selling for $115 per share. Security analysts agree with top management in projecting steady growth of 12% in dividends

Explain what is whistleblowing : Explain What is whistleblowing and How does it relate to ethics also How does it relate to the law?

Global challenges and affect on companies environment : Research and write a comparison and contrast report examining the "green" policies of General Electric, Florida Power and Light Company and two other companies. Visit the companies' web sites and review sections that describe its environmental pol..

Legal codes to crisis counseling-telephone or internet : Address and discuss ACA Ethical Standards and Legal Codes to crisis counseling that occurs via telephone or Internet.

Selection of expected return by rational investor : Investment A has an expected return of 15 percent per year, while investment B has an expected return of 12 percent per year.

International management - cultural differences : Would cultural differences be a major stumbling block for U.S. MNCs doing business in Mexico? For European firms? For Japanese firms? Explain your answer.

Explain any government levels or particular court : Specifically explain any government levels or particular court whose enactment or decision would be relevant to your company.

Sexual intimacy with a client : What does the APA say about sexual intimacy with a client? What about having a relationship with a former client?

International management - mncs : Why might MNCs be interested in studying the organizational culture in Mexican firms before deciding whether to locate there? Explain your logic.

User Account

All Pages