Question
Security A has the following historical returns: 8% in year 1, 4% in year 2, and 6% in year 3 (the given information is the
Security A has the following historical returns: 8% in year 1, 4% in year 2, and –6% in year 3 (the given information is the same as in the previous question). Suppose security A has a beta of 1. Security B has a beta of 2. The variance of security B's historical returns over the same period is 0.0016. We know that security ________ has higher total risk. Security ________ should have a higher expected return.
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Linear Algebra A Modern Introduction
Authors: David Poole
3rd edition
9781133169574 , 978-0538735452
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