You observe the following information regarding Companies X and Y: ? -Company X has a higher expected return than Company Y. -Company X has a lower standard deviation of returns than Company Y. -Company X has a higher beta than Company Y. ? Given this information, which of the following statements is CORRECT?
A. Company X has more diversifiable risk than Company Y.
B. Company X has a lower coefficient of variation than Company Y.
C. Company X has less market risk than Company Y.
D. Company X's returns will be negative when Y's returns are positive.
E. Company X's stock is a better buy than Company Y's stock.
Answer: B
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What will be an ideal response?