Question
Two stocks, A and B, possess the following characteristics. stock A Beta: 1.08 Standard Deviation: 0.12 stock B Beta: 1.00 Standard Deviation: 0.18 When unsystematic
Two stocks, A and B, possess the following characteristics.
stock A
Beta: 1.08
Standard Deviation: 0.12
stock B
Beta: 1.00
Standard Deviation: 0.18
When unsystematic risk is perfectly diversifiable then which statement about the security risk premium is most accurate?
a. stock B has the highest required risk premium because its standard deviation is largest b. stock B has the highest required risk premium because it has the least unsystematic risk c. stock B has the highest required risk premium because its total risk is largest d. stock A has the highest required risk premium because its beta is largest e. stock A has the highest required risk premium because it has the most unsystematic risk
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Airline Management Finance
Authors: Victor Hughes
1st Edition
1138610690, 978-1138610699
