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You are attempting to choose between stock A and stock X.
You are attempting to choose between stock A and stock X.
Stock A has an expected return of 9%, a standard error of 25, and a beta of 1
Stock X has an expected return of 12% and a standard error of 28, and a beta of .90
Assuming a normal distribution of possible returns, the above information means (within a roughly 70% probability of occurrence)
Select one or more:
a. Stocks A and X have the same loss potential but X has greater profit potential
b. Stocks A and X have the same profit potential but X has less loss potential
c. Stock A has more loss potential and less profit potential X
d. Stocks A and X have exactly the same loss and profit potentials
e. Stock X has less loss potential and more profit potential than A
