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You must add one of two investments to an already well- diversified portfolio. Security A Security B Expected Return = 14% Expected Return = 12%
You must add one of two investments to an already well- diversified portfolio. Security A Security B Expected Return = 14% Expected Return = 12% Standard Deviation of Standard Deviation of Returns = 15.0% Returns = 11% Beta = 1.5 Beta = 1.5 If you are a risk-averse investor, which one is the better choice?
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