What shape would the probability distribution have

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1. The probability distribution of a less risky return is more peaked than that of a riskier return. What shape would the probability distribution have for (a) completely certain returns and (b) completely uncertain returns?

2. Security A has an expected return of 7 percent, a standard deviation of returns of 35 percent, a correlation coefficient with the market of 0.3, and a beta coefficient of 1.5. Security B has an expected return of 12 percent, a standard deviation of returns of 10 percent, a correlation with the market of 0.7, and a beta coefficient of 1.0. Which security is riskier? Why?

Reference no: EM131375704

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