George has $2,500 to invest in a mutual fund. The expected return on mutual fund A is 12% and the expected return on mutual fund B is 13%. Should George pick mutual fund A or B? a) He should pick mutual fund B because it has a higher expected return. b) If George is young, he should pick B because it has a higher expected return, regardless of risk. c) Since individuals are risk averse, he should pick A because its lower expected return implies lower risk. d) There is not enough information to make the determination because the decision also depends on the variability of the expected return and George's attitude toward risk.
