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(c) You are confronted with the following choice - to invest in Security A or B. One of these securities is undervalued. Standard Deviation Beta
(c) You are confronted with the following choice - to invest in Security A or B. One of these securities is undervalued.
Standard Deviation
| Beta
| |
Securitv A
| 25%
| 1.5
|
Security B
| 40% | 1.3
|
If both securities have the same return, which would you invest in? Explain, using your knowledge of the Capital Asset Pricing Model (without any calculation).
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