Which of the following statements is correct?
A)Investment A and B have the same expected value, but A has greater risk
B)Investment B has a higher expected value than A, but also greater risk
C)Investment A and B have the same expected value, but A has lower risk than B
D)Investment A has a greater expected value than B, but B has less risk

Question

Quizplus · Accepted Answer

Since the expected value is the same for both investments, we need to compare their risks. Investment A has a lower risk than B, which means it is a safer investment. Therefore, choice C is correct. Choices A and D are incorrect because they assume that one investment has a greater expected value or less risk than the other. Choice B is incorrect because it assumes that Investment B has a higher expected value AND greater risk, which cannot be determined from the given information.

Which of the Following Statements Is Correct