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Business, 21.04.2020 18:49 josierednour285

A. You observe the following information regarding Companies X and Y:—Company X has a higher expected return than Company Y.—Company X has a lower standard deviation of returns than Company Y.—Company X has a higher beta than Company Y. Given this information, which of the following statements is CORRECT?Company X has more diversifiable risk than Company Y. Company X has a lower coefficient of variation than Company Y. Company X has less market risk than Company Y. Company X's returns will be negative when Y's returns are positive. Company X's stock is a better buy than Company Y's stock. B. Stock A's stock has a beta of 1.30, and its required return is 13.25%. Stock B's beta is 0.80. If the risk-free rate is 2.75%, what is the required rate of return on B's stock? (Hint: First find the market risk premium.)C. Mulherin's stock has a beta of 1.23, its required return is 9.50%, and the risk-free rate is 2.30%. What is the required rate of return on the market? (Hint: First find the market risk premium.)

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