Stock as beta is 15 and stock bs beta is 05 which of the, Ask an Expert

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Stock A's beta is 1.5 and Stock B's beta is 0.5. Which of the following statements must be true, assuming the CAPM is correct.

Stock A would be a more desirable addition to a portfolio then Stock B.

In equilibrium, the expected return on Stock B will be greater than that on Stock A.

When held in isolation, Stock A has more risk than Stock B. Stock B would be a more desirable addition to a portfolio than A.

In equilibrium, the expected return on Stock A will be greater than that on B.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91793208

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