# Question

Stock A has a beta of 1.5, and stock B has a beta of 1.0. Determine whether each of the statements below is true or false.

a. Stock A must have a higher standard deviation than Stock B.

b. Stock A has a higher expected return than Stock B.

c. The expected return on Stock A is 50 percent higher than the expected return on B.

a. Stock A must have a higher standard deviation than Stock B.

b. Stock A has a higher expected return than Stock B.

c. The expected return on Stock A is 50 percent higher than the expected return on B.

## Answer to relevant Questions

If an asset lies above the security market line, is it overpriced or underpriced? Explain why. Calculate the expected return, variance, and standard deviation for the stocks in the table below. Calculate the expected return of the portfolio described in the accompanying table. The expected return on a particular stock is 14%. The stock’s beta is 1.5. What is the risk-free rate if the expected return on the market portfolio equals 10%? A particular firm’s shareholders demand a 15% return on their investment, given the firm’s risk. However, this firm has historically generated returns in excess of shareholder expectations, with an average return on its ...Post your question

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