Which stock has the largest amount of systematic risk

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Reference no: EM132046000

Company C has a beta of 0.90, and Company D has a beta of 1.20. The risk free rate of return is 5%. The equity market risk premium is 6%. In addition, the standard deviation of Company C's stock returns is 12%, and the standard deviation of Company D's stock return is 8%.

a. what is the required return for Company C and for Company D?

b. if the stocks are held as part of a well-diversified portfolio, which stock has the largest amount of systematic risk?

c. if the stocks are held as single stock portfolios , which stock has the largest amount of total risk?

Reference no: EM132046000

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