Read the text. Then answer the question that follows. Baylee wants to invest money in a bicycle manufacturer. She is deciding between two companies. Velocipede is a fairly new company with an exciting line of bikes. The other company, California Cruisers, has been around for two decades. It is well-respected in the bicycle industry and remains very popular with riders. Based on this information, which of the following statements is correct? Group of answer choices Because of the lower risk of investing in Velocipede, Baylee's potential return with Velocipede would be higher than with California Cruisers. Because of the lower risk of investing in Velocipede, Baylee's potential return with Velocipede would be lower than with California Cruisers. Because of the greater risk of investing in Velocipede, Baylee's potential return with Velocipede would be higher than with California Cruisers. Because of the greater risk of investing in Velocipede, Baylee's potential return with Velocipede would be lower than with California Cruisers.

Microeconomics: Principles & Policy
14th Edition
ISBN:9781337794992
Author:William J. Baumol, Alan S. Blinder, John L. Solow
Publisher:William J. Baumol, Alan S. Blinder, John L. Solow
Chapter5: Consumer Choice: Individual And Market Demand
Section: Chapter Questions
Problem 5DQ
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Read the text. Then answer the question that follows.

Baylee wants to invest money in a bicycle manufacturer. She is deciding between two companies. Velocipede is a fairly new company with an exciting line of bikes. The other company, California Cruisers, has been around for two decades. It is well-respected in the bicycle industry and remains very popular with riders.

Based on this information, which of the following statements is correct?

Group of answer choices
Because of the lower risk of investing in Velocipede, Baylee's potential return with Velocipede would be higher than with California Cruisers.
Because of the lower risk of investing in Velocipede, Baylee's potential return with Velocipede would be lower than with California Cruisers.
Because of the greater risk of investing in Velocipede, Baylee's potential return with Velocipede would be higher than with California Cruisers.
Because of the greater risk of investing in Velocipede, Baylee's potential return with Velocipede would be lower than with California Cruisers.
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