You have analyzed four stocks and obtained the following results:
-Refer to the information above. A risk-averse investor, who will be adding the stock to his already well-diversified portfolio, would choose to invest in Stock

Question

You have analyzed four stocks and obtained the following results: 
-Refer to the information above. A risk-averse investor, who will be adding the stock to his already well-diversified portfolio, would choose to invest in Stock

Quizplus · Accepted Answer

The risk-averse investor would prefer a stock with low volatility or beta as it reduces the overall risk of the portfolio. Among the given stocks, Stock N has the lowest beta of 0.64, indicating it is less volatile than the market. Moreover, it also has the highest return of 11.7%, which is desirable for the investor. Therefore, Stock N would be the best choice for the risk-averse investor.

You Have Analyzed Four Stocks and Obtained the Following Results