Stock H has a beta of 1.8, while Stock L has a beta of 0.6. If...
Stock H has a beta of 1.8, while Stock L has a beta of 0.6. If investors’ aversion to risk increased...
| a. |
the risk premiums of Stock H and L would remain unchanged. |
|
| b. |
the risk premiums of Stock H and L would increase by the same amount. |
|
| c. |
the risk premium of Stock L would increase by more. |
|
| d. |
the risk premium of Stock H would increase by more. |
Homework Answers
The correct answer will be option d i.e. the risk premium of Stock H would increase by more.
Feel free to ask in case of any query relating to this question
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