Question: You're tasked with analyzing two investment options for a client's portfolio. Option A is a diversified mutual fund with an expected annual return of 8%

You're tasked with analyzing two investment options for a client's portfolio. Option A is a diversified mutual fund with an expected annual return of 8% and a standard deviation of 12%, while Option B is a mix of individual stocks with an expected return of 10% and a standard deviation of 18%. Considering the risk-free rate is 2%, calculate the Sharpe ratio for each investment option and interpret the results. Discuss the implications of risk-adjusted returns on portfolio allocation decisions, taking into account the investor's risk tolerance and investment objectives.

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