Which of the statements about the securities

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Beta coefficient must be true

Problem 1: Stock A has a beta of 0.55 and Stock B has a beta of 1.25. Which of the following statements about these securities? (Assume the market is in equilibrium.)

a. The required return on Stock A and Stock B will be the same.

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

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

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

e. The required return on Stock B will be greater than that on Stock A.

Reference no: EM132970459

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