Lisa is analyzing two market-linked GICs: one has a performance cap of 25%, and the other has a participation rate of 70%. The underlying index grew by 20% over the term. What will be the return on each GIC if Lisa invests $12,000 in both?
An investor comparing two funds observes that both have the same average return over five years. However, Fund A has a standard deviation of returns of 8%, while Fund B's standard deviation is 3%. Which fund is likely to have the narrower probable range of returns, and why is this significant?