# Module 5 Discussion Part A &B - Stock A has a standard deviation

Question # 00834437 Posted By: wildcraft Updated on: 11/16/2022 08:17 PM Due on: 11/17/2022
Subject Finance Topic Finance Tutorials:
Question

Fin Module 5

This discussion has 2 parts:

1. Understanding risk:
• Part A: Stock A has a standard deviation of 10% and an expected return of 8%. Stock B has a standard deviation of 15% and an expected return of 11%. A client wants to know which stock has a better risk-return profile. How would you answer her?
• Part B: Stock C has a standard deviation of 20% and a beta of 1.20. Stock D has a standard deviation of 16% and a beta of 1.44. A client wants to know which stock is riskier. How would you answer her?

2. The material in Chapter 8 of the required text clearly illustrates that there are tangible benefits for individual investors that diversify their portfolios. It makes sense then too for corporations do diversify their product or service portfolios. Or does it? Be sure to read the supplemental readings related to corporate diversification and offer your views on whether corporate diversification is beneficial for the owners (i.e., the shareholders) of the corporation.
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1. ## Solution: Module 5 Discussion Part A &B - Stock A has a standard deviation

Tutorial # 00829884 Posted By: wildcraft Posted on: 11/16/2022 08:18 PM
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