Hugo is highly risk-averse while Ted actually enjoys taking a risk. a. Which one

Question

Hugo is highly risk-averse while Ted actually enjoys taking a risk. a. Which one of the following four investments should Hugo choose? Compute coefficients of variation to help you in your choice. (Investment: Buy Stocks; Returns:Expected Value: $8,700; Standard Deviation: $5,500) (Investment: Buy bonds; Returns:Expected Value: $6,800; Standard Deviation: $2,000) (Investment: Buy commodity futures; Returns:Expected Value: $16,200; Standard Deviation: $21,500) (Investment: Buy options; Returns:Expected Value: $10,900; Standard Deviation: $12,000) b. Which one of the four investments should Mike choose?

Explanation / Answer

Hugo choose (Investment: Buy Stocks; Returns:Expected Value: $8,700; Standard Deviation: $5,500) Big is not always best, according to Damien Fahy, head of research at broker FundExpert. He reckons small firms will be the winners as Britain recovers and recommends Fidelity UK Smaller Companies. It was a top-performer in 2012, turning

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