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 more diversifiable risk than Company Y.
B) Company X has a lower coefficient of variation than Company Y.
C) Company X has less market risk than Company Y.
D) Company X's returns will be negative when Y's returns are positive.
E) Company X's stock is a better buy than Company Y's stock.
Correct Answer:
Verified
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