Question: 1. Given: Investment Expected Return, Standard Deviation, Stock M 6.0% 4.0% Stock N 18.0 12.0 Stock O 12.0 7.0 Which one gives the best return

1. Given:

Investment

Expected Return,

Standard Deviation,

Stock M

6.0%

4.0%

Stock N

18.0

12.0

Stock O

12.0

7.0

Which one gives the best return for the risk taken?

*Please explain your answer clearly. Thank you!

2. Given:

Stock

Expected Return

Standard Deviation

Beta Coefficient

AZ

8.0%

6.0%

1.0

BY

12.5

5.0

1.8

CX

20.0

7.0

2.5

Which stock should a risk-averse investor prefer if she plans to invest all her money in only one of the stocks?

*Please explain your answer clearly. Thank you!

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