The following returns were earned last year: Fund A,10%,Fund B,18%,the overall market,14%.Fund A's beta was 0.8 while Fund B's was 2.0.Therefore,the best investment was Fund A.

Question

Quizplus · Accepted Answer

The best investment cannot be determined solely by returns and beta without considering the investor's risk tolerance. Fund A had lower returns but also lower risk (beta), while Fund B had higher returns and higher risk. The best investment depends on the investor's risk preference.

The Following Returns Were Earned Last Year: Fund A,10%,Fund B,18%,the