Alpha Corp seeks investments that offer stable, long-term growth with minimal short-term fluctuations. They prioritize asset preservation and consistent dividends over high, speculative returns. Based on the data below, which investment type aligns best with Alpha Corp's objectives? | Investment Type | Average Annual Return (5 years) | Volatility (Standard Deviation) | Dividend Yield | |-----------------|-------------------------------|-------------------------------|----------------| | Growth Stocks | 12% | 15% | 1% | | Corporate Bonds | 6% | 5% | 3% | | Real Estate | 9% | 8% | 2% | | High-Yield Bonds| 10% | 12% | 5% |
✓ Correct Answer: Option B
Alpha Corp prioritizes stability (low volatility) and consistent dividends. Corporate Bonds have the lowest volatility (5%) and a good dividend yield (3%) compared to Growth Stocks and High-Yield Bonds, making them the most consistent with the stated strategy.