Problem:
The table below shows information about the performance of stocks A and B last year.
Return |
Standard Deviation |
| Stock A |
15 % |
8.3% |
| Stock B |
14% |
2.1% |
Q.1 As a financial advisor, are there factors other than return and risk that should be considered in making this decision?
Q.2 Based on these factors, what stock would you recommend to the client?
Q.3 What reasons will you convey to your client to justify your decision in recommending this stock?
Q.4 How will this recommendation impact the client?