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Shares of company A are sold at $20 per share. Shares of company B are sold at $50 per share. According to a market analyst, company A's expected return is $1 per share with a standard deviation of $0.5. And company B's expected return is $2.50 per share with a standard deviation of $1. In order to maximize the expected return and minimize the risk (standard deviation or variance), which of the following investment is better (1) 100 shares of A (2) 50 shares of A and 20 shares of B (3) 40 shares of B

Shares of company A are sold at $20 per share. Shares of company B are sold at $50 per share. According to a market analyst, company A's expected return is $1 per share with a standard deviation of $0.5. And company B's expected return is $2.50 per share with a standard deviation of $1. In order to maximize the expected return and minimize the risk (standard deviation or variance), which of the following investment is better (1) 100 shares of A (2) 50 shares of A and 20 shares of B (3) 40 shares of B

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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Shares of company A are sold at $20 per share. Shares of company B are sold at $50 per share. According to a market analyst, company A's expected return is $1 per share with a standard deviation of $0.5. And company B's expected return is $2.50 per share with a standard deviation of $1. In order to maximize the expected return and minimize the risk (standard deviation or variance), which of the following investment is better

(1) 100 shares of A (2) 50 shares of A and 20 shares of B (3) 40 shares of B

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