Investments a and B Both Offer an Expected Rate of Return

Multiple Choice

Investments A and B both offer an expected rate of return of 12. The standard deviation of A is 30 percent and that of B is 20 percent. If an investor wishes to invest in either A or B, then the investor should

A) prefer A to B.
B) prefer B to A.
C) prefer a portfolio including both A and B.
D) The answer cannot be determined without knowing investors' risk preferences.