Statements must be true about securities

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Reference no: EM13939444

Stock A's beta is 1.7 and Stock B's beta is 0.7. Which of the following statements must be true about these securities? (Assume market equilibrium.)

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

b. Stock A must be a more desirable addition to a portfolio than B.

c. The expected return on Stock A should be greater than that on B.

d. The expected return on Stock B should be greater than that on A.

e. Stock A risk is greater than that on B.

Reference no: EM13939444

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