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QUESTION

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

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