Problem

The annual standard deviation of return on Stock A’s equity is 37 percent and the correlat...

The annual standard deviation of return on Stock A’s equity is 37 percent and the correlation coefficient of these returns, with those on a well-diversified portfolio, is 0.62. Comparable numbers of Stock B are 34 percent and 0.94. Which stock is riskier? Why?

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Solutions For Problems in Chapter 8