Which security is riskier

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Security A has an expected rate of return of 6%, a standard deviation of returns of 30%, a correlation coefficient with the market of 0.25, and a beta coefficient of 0.5.

Security B has an expected return of 11%, a standard deviation of returns of 10%, a correlation with the market of 0.75, and a beta coefficient of 0.5. Which security is riskier? Why?

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This is a simple assignment which deals with understanding as to how various portfolio risk factor can affect the security rating and its return value. The assignment is defined and estimated under four parameters to justify how can the security react to the market position.

Reference no: EM132088725

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