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ME1 asked in Business & FinanceInvesting · 7 years ago

Evaluating risk or returns?

Firms having a higher expected return have a higher?

I am guessing systemmatic risk because of beta.

My other options are:

degree of certainty concerning their returns.

market value of equity.

1 Answer

Relevance
  • ?
    Lv 6
    7 years ago

    Beta obviously. Think CAPM. Expected return = rf rate + beta *market risk premium. Since market risk premium is always positive (I guess) then expected return goes up with beta.

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