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The Figures Below Show Plots of Monthly Excess Returns for Two

question 57

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The figures below show plots of monthly excess returns for two stocks plotted against excess returns for a market index. The figures below show plots of monthly excess returns for two stocks plotted against excess returns for a market index.   -Which stock is riskier to a non-diversified investor who puts all his money in only one of these stocks? A)  Stock A is riskier B)  Stock B is riskier C)  Both stocks are equally risky D)  You cannot tell from the information given.
-Which stock is riskier to a non-diversified investor who puts all his money in only one of these stocks?


Definitions:

Forecast Accurately

The process of predicting future events, values, or trends with a high degree of precision.

Unexpected Factors

External or unforeseen elements that can impact outcomes in various contexts, including economic conditions, natural disasters, or social changes.

Corporate Stock

Ownership shares in a corporation, representing a claim on part of the corporation's assets and earnings.

Single Corporation

An individual business entity recognized by law as separate from its owners, possessing rights and responsibilities.

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