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Information about the performance of stocks

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Question:

As a financial advisor, you are assigned a new client who is considering investing in one of two stocks, A or B.

The table below shows information about the performance of stocks A and B last year.

Return

Standard Deviation

Stock A

15 %

8.3%

Stock B

14%

2.1%
  • As a financial advisor, are there factors other than return and risk that should be considered in making this decision?
  • Based on these factors, what stock would you recommend to the client?
  • What reasons will you convey to your client to justify your decision in recommending this stock?
  • How will this recommendation impact the client?

Reference no: EM131077576

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