Question
Stocks A and B have the same Sharpe ratio. We are told that stock A has a volatility of 16% and an expected return of
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Stocks A and B have the same Sharpe ratio. We are told that stock A has a volatility of 16% and an expected return of 10%. The risk free rate is 2%. If stock B's volatility is equal to 10%, then B's expected return will be:
a. 22.00%
b. 2.08%
c. 4.00%
d. 7.00%
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Business Analysis And Valuation Using Financial Statements
Authors: Krishna G Palepu, Paul M Healy
4th Edition
032430286X, 9780324302868
