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Q 3 ) Suppose there are two economies, A and B . Economy A is more financially stable than B . Let's assume we estimate

Q3) Suppose there are two economies, A and B. Economy A is more financially stable than B. Let's assume we estimate the R2 of the individual stocks returns with the market indices returns of economy A and B, respectively. Where do you think the average (R2) of stocks will be higher? Assuming that you are a CEO of a firm and want to list your stock in the exchange. Where do you list your stock and why?

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