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1. There are two stocks you are considering to buy: Stock A and B. Stock A has a beta of 0.8 and Stock B has
1. There are two stocks you are considering to buy: Stock A and B. Stock A has a beta of 0.8 and Stock B has a beta of 2.5. Treasury-bills have a return rate of 4.00% and the market portfolio has an expected return of 11.00%. Compared to the less risky stock, the riskier stock has
11.9% higher expected return. |
11.3% higher expected return. |
10.9% higher expected return. |
11.3% lower expected return. |
11.9% lower expected return. |
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