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    Beta and Risk

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    If you are relatively risk adverse, would you require a higher beta stock to induce you to invest than the beta required by a person more willing to take risks? Explain.
    From the investment instruments in the simulation, is it possible to construct a portfolio that is risk free? Explain.

    © BrainMass Inc. brainmass.com June 3, 2020, 5:28 pm ad1c9bdddf
    https://brainmass.com/business/capital-asset-pricing-model/beta-and-risk-27346

    Solution Summary

    Answers 2 questions:
    1) Would a person require a higher beta stock to induce him/her to invest than the beta required by a person more willing to take risks?
    2) Is it possible to construct a portfolio that is risk free?

    $2.19

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