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Security A has an expected rate of return of 6%, a standard deviation of returns of 30%, a correlation coefficient with the market of -0.25, and a beta coefficient of -0.5. Security B has an expected return of 11%, a standard deviation of returns of 10%, a correlation with the market of 0.75, and a beta coefficient of 0.5. Which security is riskier

Respuesta :

Answer:

Security B

Explanation:

The risk of an asset is measured by beta

Market beta is measured by 1. Securities that move more than the market have a beta greater than 1 .

Securities that moves less than the market have a beta less than 1

The beta of security A is less than that of security B. Thus, security B is more risky

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