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/he plans to invest all her money in only one of the stocks?

Hint:

Standard deviation / Return

=> AZ = 6 / 8 = 0.75

BY = 5 /12.5 = 0.4

CX = 7 / 20 = 0.35

Based on the above information should choose the smallest rate => the CX stock.

** But there is another answer like this:

"A risk-averse investor prefers to invest in an investment that has the lowest risk irrespective of returns. Stock BY which has the lowest standard deviation of 5% among all the other investments. => Choose BY."

So which answer is the correct answer? CX or BY?

*Please explain your answer clearly. Thank you!