Investment A has an expected return of 15% per year,while Investment B has an expected return of 12% per year.A rational investor will choose
A) Investment A because of the higher expected return.
B) Investment B because a lower return means lower risk.
C) Investment A if A and B are of equal risk.
D) Investment A only if the standard deviation of returns for A is higher than the standard deviation of returns for B.

Question

Quizplus · Accepted Answer

A rational investor would choose Investment A over Investment B if both investments have equal risk, as they would be maximizing their expected return without increasing their exposure to risk.

Investment a Has an Expected Return of 15% Per Year,while