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Dylan Rands is an investor and wants to add another share to his well-diversified portfolio. After some analysis, he narrows his choices down to the
- Dylan Rands is an investor and wants to add another share to his well-diversified portfolio.
- After some analysis, he narrows his choices down to the following two shares: A and B
| Name of Company | Standard deviation | Beta |
| Share A | 16% | 0.9 |
| Share B | 13% | 1.2 |
- Write a brief memo to Dylan explaining what standard deviation and beta stand for. What do they measure?
- Show a formula that demonstrates the relationship between standard deviation and beta two in a formula.
- Based on the information above, can we accurately choose which share is a better selection? Why? Explain and provide reasoning in your answer.
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Personal Finance
Authors: Megan Noel, Dan French
2nd Edition
1465246479, 9781465246479
