Mba Lesson

Instructions

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.

ReturnStandard DeviationStock A15 %8.3%Stock B14%2.1%

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

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