Compare TEC shares against the market portfolio using both standard deviation and beta as risk measure. What are you conclusion? Explain your answer.
TEC Market Portfolio
Expected Return 15% 20%
Standard Deviation 25% 20%
Beta 0.50 1.00.
In finance, standard deviation is applied to the annual rate of return of an investment to measure the investment's volatility (risk). A volatile stock would have a high standard deviation. In this case, the standard deviation of TEC is higher than that of the market portfolio, indicating it's more volatile over the years than other ...
The solution provides detailed explanations and discussions for the problem.