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Two stocks with the same expected cash flow one period from today (after which both stocks will be worthless) of 100$ have different levels of systematic risk. Stock A has 1.2 units of systematic risk and is priced at $85 per share while Stock B has 1.5 units of systematic risk and is priced at $87 per share. Briefly describe whether the situation described is a easonable situation, why or why not?

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Financial Management, Finance

Category:- Financial Management
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