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Standard deviation of returns

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Robert is evaluating two shares, Share A and Share B. He finds that the standard deviation of returns for both Share A and Share B is exactly the same. He then makes the following two statements:

(i) "It will be indifferent for me to purchase Share A or Share B, as the expected returns for both shares should always be the same." Do you agree or disagree with this statement? Explain.

(ii) "If there is another share that has higher expected return than that of Share A and Share B, then its standard deviation of returns must also be higher than that of Share A and Share B as well." Do you agree or disagree with this statement? Explain.

Reference no: EM133070673

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