Question: Select the best answer. Stock A has a standard deviation of 30%, an expected return of 60%. Stock B has a standard deviation of 15%,
Select the best answer. Stock A has a standard deviation of 30%, an expected return of 60%. Stock B has a standard deviation of 15%, an expected return of 15%. You plan to own only one stock, either Stock A or Stock B. a. You would select Stock A because it has the highest expected return, therefore the highest potential reward. b. You select Sock B because it has the lowest standard deviation, therefore has the lowest risk. c. You would select Stock B because it has the lowest Coefficient of Variation, therefore has the most attractive risk/reward ratio. d. You would select Stock A because it has the lowest Coefficient of Variation, therefore has the most attractive risk/reward ratio. e. You would select neither stock because each has a standard deviation that is equal or less than its expected return
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