Stock A has more systematic risk than stock B, stock B has more unsystematic risk than stock A, and it is unclear which stock (A or B) has more total risk. Both stock A and stock B have more systematic risk than the market. Which of the following assertions is most consistent with finance theory? Stock B would have a higher expected return than stock A and stock A would have a higher expected return than the market Stock A would have a higher expected return than stock B and stock A would have a higher expected return than the market Stock B would have a higher expected return than stock A and the market would have a higher expected return than stock A Stock A would have a higher expected return than stock B and the market would have a higher expected return than stock A Because it is unclear which stock (A or B) has more total risk, it is unclear which stock (A or B) would have a higher expected return
Stock A has more systematic risk than stock B, stock B has more unsystematic risk than stock A, and it is unclear which stock (A or B) has more total risk. Both stock A and stock B have more systematic risk than the market. Which of the following assertions is most consistent with finance theory? Stock B would have a higher expected return than stock A and stock A would have a higher expected return than the market Stock A would have a higher expected return than stock B and stock A would have a higher expected return than the market Stock B would have a higher expected return than stock A and the market would have a higher expected return than stock A Stock A would have a higher expected return than stock B and the market would have a higher expected return than stock A Because it is unclear which stock (A or B) has more total risk, it is unclear which stock (A or B) would have a higher expected return
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![Stock A has more systematic risk than stock B, stock B has more unsystematic risk than stock A, and it is unclear which stock (A
or B) has more total risk. Both stock A and stock B have more systematic risk than the market. Which of the following
assertions is most consistent with finance theory?
Stock B would have a higher expected return than stock A and stock A would have a higher expected return than the market
Stock A would have a higher expected return than stock B and stock A would have a higher expected return than the market
Stock B would have a higher expected return than stock A and the market would have a higher expected return than stock A
Stock A would have a higher expected return than stock B and the market would have a higher expected return than stock A
Because it is unclear which stock (A or B) has more total risk, it is unclear which stock (A or B) would have a higher expected
return](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F19d0c0ee-b2f7-4400-bddc-d84e0eebb818%2Ffb4f28c2-3a25-4b45-9367-5d9c00e55ad3%2Fdg3m33_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Stock A has more systematic risk than stock B, stock B has more unsystematic risk than stock A, and it is unclear which stock (A
or B) has more total risk. Both stock A and stock B have more systematic risk than the market. Which of the following
assertions is most consistent with finance theory?
Stock B would have a higher expected return than stock A and stock A would have a higher expected return than the market
Stock A would have a higher expected return than stock B and stock A would have a higher expected return than the market
Stock B would have a higher expected return than stock A and the market would have a higher expected return than stock A
Stock A would have a higher expected return than stock B and the market would have a higher expected return than stock A
Because it is unclear which stock (A or B) has more total risk, it is unclear which stock (A or B) would have a higher expected
return
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