Question

Consider two stocks, ABC and DEF. If you are only going to invest in ONE stock, which one would you prefer, ABC or DEF? Stock Expected Return Standard Deviation ABC 10% 30.00% DEF 10% 32.00% Submit Answer format: Text

#20 Consider two stocks, ABC and DEF. If you are only going to invest in ONE stock, which one would you prefer, ABC or DEF? Stock Expected Return Standard Deviation ABC 10.00% 20.00% DEF 8.00% 14.00

Answer 1

Ol Given Stockis ABC DEF Expected Return 107 Standard Deuiatian (Risk) | 30% 10% 327. ANS If We have to Incest in One Stock Only Then We should prefer to Invest in Stock ABC leccause for a percentage of Return It has Joneer Risk . (štandard Demoties ) as Compare to Stock Def. so We should prefer to invest in Stock ABC

#20 Cofficient of Variation Standard Deniatian (Risk) - Expected Return Cofficient of Variation Simply Shane Risk taken for every one percent of Return

Grinen Stocks ABC Def 10:1 Experted Return Standard Denistian (Risk) 20% 14%. 1.75 Cofficient of Variation - Standard deviation Expected Return (20%) Ans & If We have to Inuest Cheaty in One Stack then We Shall Innest in Stock DEF because its Cofficient of Variation is Jone as Compare to Stock ABC. It simply shows that Risk to earn every one percent is Tower in Stock Def so We should prefer to Invest in Stock DEF.