8-5 Stock A has an expected return of 7 percent, a standard deviation of excepted returns of 35 percent, correlation coefficient with the market of -3.0, and a beta coefficient of -0.5. Stock B has an excepted return of 12 percent, a standard deviation of returns of 10 percent, a 0.7 correlation with the market, and a beta coefficient of 1.0. Which security is riskier? Why? |