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Question
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?
a. Company X has a lower coefficient of variation than Company Y.
b. Company X has less market risk than Company Y.
c. Company X's returns will be negative when Y's returns are positive.
d. Company X's stock is a better buy than Company Y's stock.
e. Company X has more diversifiable risk than Company Y.
Answer
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