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Figure 27-2

Question 22

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Figure 27-2.On the graph,x represents risk and y represents return. Figure 27-2.On the graph,x represents risk and y represents return. -Robert is risk averse and has $1,000 with which to make a financial investment.He 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.Robert should choose A) option A. B) option B. C) option C. D) either A or B because they are the same to him.
-Robert is risk averse and has $1,000 with which to make a financial investment.He 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.Robert should choose


A) option A.
B) option B.
C) option C.
D) either A or B because they are the same to him.

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