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C- (Ex-ante and ex-post risk and return) During a finance lecture, Professor Johnson explained to his students the relation between higher risk and higher expected
C- (Ex-ante and ex-post risk and return) During a finance lecture, Professor Johnson explained to his students the relation between higher risk and higher expected returns. At the end of the lecture, one of the students asked: "Yesterday I read in the paper that the U.S. stock markets earned higher returns than 15 African stock markets in the last decade. How is that fact consistent with high risk equaling higher returns? How would you advise Professor Johnson to respond to his students? (Your answer should include the worlds ex-ante and ex-post.)
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