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Consider the following observed performance of two securities, J and K on the LUSE year LUSE all share index J K % % % I
Consider the following observed performance of two securities, J and K on the LUSE
| year | LUSE all share index | J | K |
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| % | % | % |
| I | -4 | -2 | -1 |
| II | -2 | 0 | -0.2 |
| III | 0 | 2 | 0.6 |
| IV | 2 | 5 | 2 |
| V | 4 | 8 | 6 |
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REQUIRED
- Which of the two stocks has higher total risk? Explain
- Compute and explain the systematic risk of each security
- Compute and explain the diversification potential of each security in the market
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Financial Accounting
Authors: Robert Libby, Patricia Libby, Frank Hodge
10th Edition
1260481352, 978-1260481358
