You are thinking of adding one of two investments to an already well- diversified portfolio. If you are a risk-averse investor,which one is the better choice?
A) Security A
B) Security B
C) Either security would be acceptable because they have the same beta.
D) Security B, but only if Security B's required return is greater than 12%.

Question

You are thinking of adding one of two investments to an already well- diversified portfolio.  If you are a risk-averse investor,which one is the better choice?
A) Security A 
B) Security B 
C) Either security would be acceptable because they have the same beta. 
D) Security B, but only if Security B's required return is greater than 12%.

Quizplus · Accepted Answer

The Answer of You are thinking of adding one of two investments to an already well- diversified portfolio.  If you are a risk-averse investor,which one is the better choice?
A) Security A 
B) Security B 
C) Either security would be acceptable because they have the same beta. 
D) Security B, but only if Security B's required return is greater than 12%.

You Are Thinking of Adding One of Two Investments to an Already