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Stock A has a beta of 1.4, and stock B a beta of -1.2. Use the information to answer the following questions: (1) Use your
Stock A has a beta of 1.4, and stock B a beta of -1.2. Use the information to answer the following questions: (1) Use your own word to describe each stock's risk level in relation to stock market risk level. (2) If the stock market return is expected to increase by 5%, use beta to predict the percentage change in each stock's return. (3) If the stock market is expected to decline (i.e. be bearish) in the next month, which stock should investors pick and buy? Use your own word to explain why. Stock A has a beta of 1.4, and stock B a beta of -1.2. Use the information to answer the following questions: (1) Use your own word to describe each stock's risk level in relation to stock market risk level. (2) If the stock market return is expected to increase by 5%, use beta to predict the percentage change in each stock's return. (3) If the stock market is expected to decline (i.e. be bearish) in the next month, which stock should investors pick and buy? Use your own word to explain why
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