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1. Assumed the betas for securities A,B, and C are shown here. Security Beta A 1.4 B .80 C -.90 A. Calculate the change in
1. Assumed the betas for securities A,B, and C are shown here.
Security Beta
A 1.4
B .80
C -.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. Which security might perform best during an economic downturn? Why?
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