Batina is a conservative investor,much to the chagrin of her husband.He cannot believe she values stability in an investment over the historical rate of return.The standard deviations of the following returns of investment are given below.Which investment should Batina choose?

Question

Quizplus · Accepted Answer

Since Batina is a conservative investor, she is more concerned about stability and less about historical rates of return. Therefore, she needs to choose an investment that has the lowest standard deviation which shows that the returns are more stable. Among the given options, Investment B has the lowest standard deviation of 0.98, making it the best choice for Batina.

Batina Is a Conservative Investor,much to the Chagrin of Her