You are thinking of investing in one of two assets. Asset A has higher systematic risk than asset B. You can be sure that asset A's ________ return will be higher than asset B's, but you can't be sure if asset A's ________ return will be higher than asset B's.

Question

Quizplus · Accepted Answer

The statement suggests that asset A has higher systematic risk but does not guarantee a higher expected return. Therefore, the best choice is option C where we can be sure that asset A's expected return may be higher than asset B, but we can't be sure about the realized returns until the investment is made.

You Are Thinking of Investing in One of Two Assets