In a situation where an investor must choose between two investment options, one with a guaranteed return but low yield and another with a high potential yield but significant risk of loss, how should the investor assess which option is optimal?

When an investor faces two choices, one with a guaranteed return and the other with high potential but risk, they should consider their financial goals and risk tolerance. If the investor values security and needs a steady income, the guaranteed option might be better, even if it offers lower returns. On the other hand, if they are willing to take risks for the chance of higher gains, they might lean toward the riskier investment. For example, a person saving for retirement might prefer the guaranteed return to ensure they have enough money later, while a younger investor might choose the riskier option to grow their wealth faster. Ultimately, the best choice depends on the investor's individual situation, including how much risk they can handle and what they hope to achieve with their investments.