Unformatted text preview: (b) all your funds in stock B These have a 5% risk with a 14% return (c) 40% in A and 60% in B These have a risk of 3.12% with a return of 12.4%. Option (a) has the least risk at 3% but the least return at only 10%, option (b) has the most risk at 5% with the most return at 14% and option (c) gives a higher return of 12.4% which is an additional 2.4% over Stock A with just a slightly more risk of 3.12%. Taking the risk per unit of return, option (c) is best as it gives the least risk per unit of expected return. (This answer must use the numerical information in your answers derived above)....
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 Spring '12
 GibbonsCobb
 Standard Deviation, Volatility, Deviation

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