Security a Will Yield a 6% Return in One Year

Multiple Choice

Security A will yield a 6% return in one year. Security B will either yield a 3% return or a 9% return in year with equal probability. Which is the better investment based on risk aversion and why?

A) Security A, because it has a higher expected return with less risk.
B) Security B, because it has a higher expected return with less risk.
C) Security A, because it has an equivalent expected return with less risk.
D) Security B, because it may potentially produce a 9% return.