Portfolio AB was created by investing in a combination of Stocks A and B. Stock A has a beta of 1.2 and a standard deviation of 25%. Stock B has a beta of 1.4 and a standard deviation of 20%. Portfolio AB has a beta of 1.25 and a standard deviation of 18%. Which of the following statements is CORRECT?
A. Stock A has more market risk than Stock B but less stand-alone risk.
B. Portfolio AB has more money invested in Stock A than in Stock B.
C. Portfolio AB has the same amount of money invested in each of the two stocks.
D. Portfolio AB has more money invested in Stock B than in Stock A.
E. Stock A has more market risk than Portfolio AB.
Answer: B
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Theft of Trade Secrets. Four Pillars Enterprise Co is a Taiwanese company owned by Pin Yen Yang. Avery Dennison, Inc, a U.S. corporation, is one of Four Pillars's chief competitors in the manufacture of adhesives. In 1989, Victor Lee, an Avery employee,
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