Question: Consider two stocks with different expected returns and standard deviations. If assets must be held in isolation, and if investors are risk averse, the stock

Consider two stocks with different expected returns and standard deviations. If

Consider two stocks with different expected returns and standard deviations. If assets must be held in isolation, and if investors are risk averse, the stock with the higher standard deviation will also have the greater required return. However, if assets can be held in portfolios, it is possible that the required return could be higher on the stock with the lower standard deviation. True False

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