Investment A produced annual rates of return of 4%, 8%, 14% and 6% respectively over the past four years. Investment B produced annual rates of return of 5%, 12%, 8% and 11% respectively over the past four years. Which investment was more risky over the past 4 years?

Question

Byron Davila

Business

4 November, 05:03

Investment A produced annual rates of return of 4%, 8%, 14% and 6% respectively over the past four years. Investment B produced annual rates of return of 5%, 12%, 8% and 11% respectively over the past four years. Which investment was more risky over the past 4 years?

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Answers (1)

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Rolando · Answer 1

A

Explanation:

The investment A was more risky, but in general they were both pretty much a risk.

With both having a produced annual rates of return in under 10%

Reason for A being the riskier is that his annual rate of return in average was 8%, while B's annual rate was 9%

Difference may seem small, but for bigger investments 1% can be a deal breaker.