Question: Please solve all parts completely: 3. Based on forecast alphas, risk, and transactions costs, you are planning to buy $1,000,000 of stocks A and B.

Please solve all parts completely:

3. Based on forecast alphas, risk, and transactions costs, you are planning to buy $1,000,000 of stocks A and B. You know that stock B is twice as volatile as A, and that its daily trading volume is twice that of stock A. Which trade do you expect to exhibit the higher price impact? How should the price impact for stock B compare to the price impact for stock A

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