Question: Mark each statement True or False. Explain your answer. a) The beta of Stock A is lower than the beta of Stock B. We can

Mark each statement True or False. Explain your answer.

a) The beta of Stock A is lower than the beta of Stock B. We can conclude that Stock A is less volatile than Stock B.

b) According to CAPM, stocks with higher idiosyncratic risk must also have higher expected returns to compensate risk-averse investors for holding the additional risk.

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