After 6 months, the Central Bank cuts interest rates to 3% and the analysts update their...

 

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After 6 months, the Central Bank cuts interest rates to 3% and the analysts update their forecasts as follows. Economic Outlook Probability Stock 1 return Stock 2 return Market Positive 35% 14% 38% 12% Stable 55% 21% 11% 6% Negative 15% -5% -32% -5% In terms of diversifiable and non-diversifiable risk, which stock is now riskier and why? Which stock would you select? After 6 months, the Central Bank cuts interest rates to 3% and the analysts update their forecasts as follows. Economic Outlook Probability Stock 1 return Stock 2 return Market Positive 35% 14% 38% 12% Stable 55% 21% 11% 6% Negative 15% -5% -32% -5% In terms of diversifiable and non-diversifiable risk, which stock is now riskier and why? Which stock would you select?

Answer rating: 100% (QA)

To determine which stock is riskier after the changes in the economic outlook and interest rates we ... View the full answer