You Are Thinking of Adding One of Two Investments to an Already

Multiple Choice

You are thinking of adding one of two investments to an already well- diversified portfolio.

If you are a risk-averse investor,which one is the better choice?

A) Security A
B) Security B
C) Either security would be acceptable because they have the same beta.
D) Security B, but only if Security B's required return is greater than 12%.