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A stock has an expected return of 12 percent and a standard deviation of 20 percent. Long-term Treasury bonds have an expected return of 9
A stock has an expected return of 12 percent and a standard deviation of 20 percent. Long-term Treasury bonds have an expected return of 9 percent and a standard deviation of 15 percent. Given this data, which of the following statements is correct?
A. The two assets have the same coefficient of variation.
B. The stock investment has a better risk-return trade-off.
C. The bond investment has a better risk-return trade-off.
D. Both investments have the same diversifiable risk.
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