Mr Bob Neil is considering a 1 year investment in shares in one of the following three companies.

1.      Company X: expected return = 15% with a standard deviation of 15%

2.      Company Y: expected return = 15% with a standard deviation of 20%

3.      Company Z: expected return = 20% with a standard deviation of 20%

Rank the investments in order of preference for each of the cases where it is assumed that Mr Bob Neil is:

A)     Risk Averse

B)     Risk Neutral

C)     Risk Seeking

What are the reasons ?

Answer rating: 100% (QA)

A If Mr Bob Neil is riskaverse he prefers lower levels of risk for a given level of return In this c... View the full answer