Multiple Choice
Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true about these securities? (Assume market equilibrium.)
A) When held in isolation, Stock A has more risk than Stock B.
B) Stock B must be a more desirable addition to a portfolio than A.
C) Stock A must be a more desirable addition to a portfolio than B.
D) The expected return on Stock A should be greater than that on B.
Correct Answer:
Verified
Correct Answer:
Verified
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