Capital asset pricing model holds

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Reference no: EM13809764

Stock A's beta is 1.4 and Stock B's beta is 1.5. If we assume that the Capital Asset Pricing Model holds:

a. Stock A would be a more desirable addition to a portfolio then Stock B

b. In equilibrium, the expected return of Stock B will be greater than that of Stock A.

c. When held in isolation, Stock A has more risk than Stock B

d. Stock B would be more desirable addition to a portfolio than A

e. In equilibrium, the expected return of Stock A will be greater than the of B

Reference no: EM13809764

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