Mary Beth is risk averse and has $1,000 with which to make a financial investment.She has three options.Option A is a risk-free government bond that pays 5 percent interest each year for two years.Option B is a low-risk stock that analysts expect to be worth about $1,102.50 in two years.Option C is a high-risk stock that is expected to be worth about $1,200 in four years.Mary Beth should choose
A)option A.
B)option B.
C)option C.
D)either A or B because they are the same to her.

Question

Quizplus · Accepted Answer

Mary Beth is risk averse, meaning she prefers lower risk investments. Option A is risk-free and guarantees a 5% return each year for two years, while options B and C involve more risk. Therefore, option A is the best choice for Mary Beth.

Mary Beth Is Risk Averse and Has $1,000 with Which