Question: Tim Trepid is highly risk-averse while Mike Macho actually enjoys taking a risk. Investments Returns: Expected Value Standard Deviation Buy stocks $ 9,790 $ 5,950

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

Investments Returns: Expected Value Standard Deviation
Buy stocks $ 9,790 $ 5,950
Buy bonds 7,130 2,070
Buy commodity futures 22,300 22,500
Buy options 13,500 22,300

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 options

  • Buy commodity futures

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