As a recent graduate you serve as your own financial advisor. You are interested in investing in the soft drink industry, Pepsi or Coca Cola. What has caught your attention is Pepsi has a significant larger return on equity (ROE). For example, Pepsi reported a return on equity 44.25% and a return on asset of 8.41% while Coca Cola reported a return on equity of 40.16% and a return on assets of 11.03% as of June 30, 2023, respectively. However, you are worried about risk. 

Which investment is riskier?

Answer rating: 100% (QA)

While Pepsi does have a higher ROE than CocaCola based on the most recent figures that alone does no... View the full answer