Use the following information to answer the question below.

-Which investment is preferred?
A) Norwood, Inc. is preferred due to its lower coefficient of variation.
B) BIF Corporation is preferred due to its higher coefficient of variation.
C) A rational investor would be indifferent in investment choice.
D) Either investment would be suitable since they both have positive expected returns.

Question

Use the following information to answer the question below.
 
-Which investment is preferred?
A) Norwood, Inc. is preferred due to its lower coefficient of variation. 
B) BIF Corporation is preferred due to its higher coefficient of variation. 
C) A rational investor would be indifferent in investment choice. 
D) Either investment would be suitable since they both have positive expected returns.

Quizplus · Accepted Answer

A lower coefficient of variation indicates a better risk-adjusted return, making Norwood, Inc. the preferred investment for a rational investor seeking to maximize returns while minimizing risk.

Use the Following Information to Answer the Question Below