Given the following expected returns and standard deviations of assets B, M, Q, and D, which asset should the prudent financial manager select?
A) Asset B
B) Asset M
C) Asset Q
D) Asset D

Question

Given the following expected returns and standard deviations of assets B, M, Q, and D, which asset should the prudent financial manager select? 
A) Asset B 
B) Asset M 
C) Asset Q 
D) Asset D

Quizplus · Accepted Answer

Asset B has the highest expected return and the lowest standard deviation among all the assets, indicating that it offers the highest return for the given level of risk. Therefore, the prudent financial manager should select Asset B.

Given the Following Expected Returns and Standard Deviations of Assets