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4. Now suppose the net returns of the three stocks are given by table 2 . Table 2: The net returns of the stocks. (a)
4. Now suppose the net returns of the three stocks are given by table 2 . Table 2: The net returns of the stocks. (a) Let r~A and r~C be the net returns of stocks A and C respectively. Can you find a random variable z~ such that r~A=r~C+z~ and E[z~]=0 ? (b) Can you find a risk-averse investor who prefers stock A (or B ) to stock C
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