2-2 Scenario Analysis: Stock Options

timer Asked: May 8th, 2018
account_balance_wallet $30

Question description

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 Deviation
Stock 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?

Specifically, the following critical elements must be addressed:

I. Main Elements

II. Integration and Application

III. Analysis

IV. Critical Thinking

Guidelines for Submission: Your analysis of the scenario must be submitted as a 1- to 2-page Microsoft Word document with double spacing and 12-point Times New Roman font.

Tutor Answer

School: UT Austin

Hey buddy, I've attached the answer, good luck!

Surname 1

Stock Options

Making investment decisions requires careful evaluation of an opportunity to ensure that it
will yield maximum returns. As such, before investing in stocks there are other factors to put into
account such as the stock’s beta, the value of the stock, the client’s risk tolerance, the earnings
per share, and the di...

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Outstanding Job!!!!

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