Ivan, a financial investor, wants to purchase either a stock that will earn a guaranteed 6% per year or a stock that is variable, earning 0% some years and 12% other years. Assuming that he can purchase only one stock, which one will he likely choose?

Question

Quizplus · Accepted Answer

Ivan is likely to choose the guaranteed return because it offers a steady and predictable income, reducing the risk associated with the variability of returns.

Ivan, a Financial Investor, Wants to Purchase Either a Stock