QSO 510 COMPLETE SOLUTION 2-1 AND 2-2 - 99742

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deepeyes
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  • From: Business, Finance
  • Posted on: Wed 17 Oct, 2018
  • Request id: # 79772
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2-2 Scenario Analysis: Stock Options

 

  1. As a financial advisor, are there factors other than return and risk that should be considered in making this decision?

 

Having a larger historical data set for both stocks should be considered if available to examine how the inverstment has performed in the past use as an indication of how it will perform in the future. Using past yearly or monthly returns on stock to better analyze the variance of past returns of each stock. Also understanding the client’s risk tolerance would be helpful as well to determine the best possible decision between stocks.

 

  1. Based on these factors, what stock would you recommend to the client?

 

Simply based on these two factors it is important to understand the person you are investing for. If your client is more open to higher rist stock than Stock A whould be the better choice, as it has the potential return rate of 23.3%

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