Which investment has the least amount of risk? Standard deviation = $400, expected return = $5,000 Standard deviation = $600, expected return = $400 Standard deviation = $500, expected return = $800 Standard deviation = $450 expected return = $4.500.

Which investment has the least amount of risk? Standard deviation = $400, expected return = $5,000 Standard deviation = $600, expected return = $400 Standard deviation = $500, expected return = $800 Standard deviation = $450 expected return = $4.500.

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter8: Analysis Of Risk And Return

Section: Chapter Questions

Problem 2P

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Concept explainers

Market Efficiency

Market efficiency refers to the market's ability to provide investors with all available information about investment options for buying and selling securities. Market efficiency reflects the true value of securities without undervaluing or overvaluing them. When the quality and quantity of information increase, the market becomes more efficient, allowing it to reduce arbitrage and obtain higher market returns from investment. In a well-functioning market, everyone receives all information completely and immediately at no cost. It opens up a plethora of opportunities for investors to access various investment options.

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Which investment has the least amount of risk?
Standard deviation = $400, expected return = $5,000
Standard deviation = $600, expected return = $400
Standard deviation = $500, expected return =
$800
Standard deviation = $450, expected return = $4,500

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