The following figure shows plots of monthly rates of return and the stock market for two stocks.

Question:

a. Which stock is riskier to an investor currently holding her portfolio in a diversifi ed portfolio of common stock?

b. Which stock is riskier to an undiversifi ed investor who puts all of his funds in only one of these stocks?

rA – rf rM – rf rB – rf rM – rf LO.1

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Essentials Of Investments

ISBN: 9780697789945

8th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jul 26, 2024 09:02 AM

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The following figure shows plots of monthly rates of return and the stock market for two stocks.

Question:

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Essentials Of Investments

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