Suppose you are comparing two portfolios of stocks to determine which is more appropriate for all of
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Question:
Suppose you are comparing two portfolios of stocks to determine which is more appropriate for all of your investments. Portfolio A contains a large number of stocks, but each stock appears to have a relatively high amount of risk which you believe is unsystematic in nature and a relatively low level of systematic risk. Portfolio B also contains a large number of stocks, however each stock in that portfolio seems to contain a relatively large amount of systematic risk and a low level of unsystematic risk. If both portfolios have the same expected return, which portfolio would most likely be the best choice?
a.Portfolio Ab.Portfolio Bc.There is no information that would indicate that one portfolio is better than the other.
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