Question: ABC Company are now considering the following new projects and to introduce the most attractive project to the shareholders of ABC Company.
Project A:
Expected return/Beta coefficient/Standard deviation of returns are 18% / 1.3 / 44%
Project B:
Expected return/Beta coefficient/Standard deviation of returns are 16% / 1.17 / 67%
Project C:
Expected return/Beta coefficient / Standard deviation of returns are 26% / 1.72 / 60%
The risk-free-rate and expected market return are 5% and 15%.
Kindly help me to explain whether ABC should be focused on the new projects's beta or the standard deviation for making a decision. And which is the best? Why?