If the expected return of stock A is 12% and that of stock B is 14%,and both have the same variance,then nondiversified investors would prefer stock B to stock A.

Question

Quizplus · Accepted Answer

Nondiversified investors are more concerned with the expected return rather than the variance, so they would prefer the stock with the higher expected return, which in this case is stock B.

If the Expected Return of Stock a Is 12% and That