Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true, assuming the CAPM is correct. Group of answer choices Stock A would be a more desirable addition to a portfolio then Stock B. Stock B would be a more desirable addition to a portfolio than A. In equilibrium, the expected return on Stock A will be greater than that on B. In equilibrium, the expected return on Stock B will be greater than that on Stock A. When held in isolation, Stock A has more risk than Stock B.
Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true, assuming the CAPM is correct. Group of answer choices Stock A would be a more desirable addition to a portfolio then Stock B. Stock B would be a more desirable addition to a portfolio than A. In equilibrium, the expected return on Stock A will be greater than that on B. In equilibrium, the expected return on Stock B will be greater than that on Stock A. When held in isolation, Stock A has more risk than Stock B.
Chapter8: Analysis Of Risk And Return
Section: Chapter Questions
Problem 1P
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Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true, assuming the CAPM is correct.
Group of answer choices
Stock A would be a more desirable addition to a portfolio then Stock B.
Stock B would be a more desirable addition to a portfolio than A.
In equilibrium, the expected return on Stock A will be greater than that on B.
In equilibrium, the expected return on Stock B will be greater than that on Stock A.
When held in isolation, Stock A has more risk than Stock B.
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