P5.13 Assume the betas for securities A, B, and C are as shown here. Security A B
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P5.13 Assume the betas for securities A, B, and C are as shown here. Security A B Beta 1.40 0.80 -0.90
a. Calculate the change in return for each security if the market experiences an increase in its rate of return of 13.2% over the next period.
b. Calculate the change in return for each security if the market experiences a decrease in its rate of return of 10.8% over the next period.
c. Rank and discuss the relative risk of each security on the basis of your findings. Which security might perform best during an economic downturn? Explain.
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Related Book For 
Fundamentals Of Investing
ISBN: 9780136117049
11th Edition
Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott B. Smart, Scott J. Smart
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