Two investments to an already well- diversified portfolio

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Reference no: EM13921288

You must add one of two investments to an already well- diversified portfolio.

Security A Security B

Expected Return = 14% Expected Return = 12%

Standard Deviation of Standard Deviation of

Returns = 15.0% Returns = 11%

Beta = 1.5 Beta = 1.5

If you are a risk-averse investor, which one is the better choice?

A) Security A

B) Security B

C) Either security would be acceptable.

D) Cannot be determined with information given.

Reference no: EM13921288

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