You are thinking of adding one of two investments to an already well diversified portfolio. Security A with expected return of 12%, standard deviation of 20.9%, and beta of 0.8. Security B with expected return of 12%, standard deviation of 10.1%, and beta of 2. 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
d. Cannot be determined with information given
1 answer