Question: Tim Trepid is highly risk-averse while Mike Macho actually enjoys taking a risk. Investments Returns: Expected Value Standard Deviation Buy stocks $ 9,400 $ 5,670

Tim Trepid is highly risk-averse while Mike Macho actually enjoys taking a risk.

Investments Returns: Expected Value Standard Deviation
Buy stocks $ 9,400 $ 5,670
Buy bonds 7,050 2,590
Buy commodity futures 26,100 30,900
Buy options 21,500 22,000

a-1. Compute the coefficients of variation. (Round your answers to 3 decimal places.)

a-2. Which one of the following four investments should Tim choose?

multiple choice 1

  • Buy bonds

  • Buy stocks

  • Buy commodity futures

  • Buy options

b. Which one of the four investments should Mike choose?

multiple choice 2

  • Buy bonds

  • Buy stocks

  • Buy commodity futures

  • Buy options

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