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Suppose that the stock market offers an expected rate of return of 20%, with a standard deviation of 13%. Coca-Cola has an expected rate of
Suppose that the stock market offers an expected rate of return of 20%, with a standard deviation of 13%. Coca-Cola has an expected rate of return of 18%, with a standard deviation of 16%. In view of the market's higher expected return and lower uncertainty, would anyone choose to hold Coca-Cola in a portfolio? Why?
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