can you answer my question number "c"?
1 Answer(s)
Binny
The return under a) is like an absolute return that does not factor in risk for the return calculations.
Under b) risk abd volatility is factored in using beta and risk premium. Hence the returns you get are a "risk adjusted return". Hence the numbers are different. Typically your return under b) should be lesser than a)
May 15 2013 10:21 AM
Under b) risk abd volatility is factored in using beta and risk premium. Hence the returns you get are a "risk adjusted return". Hence the numbers are different. Typically your return under b) should be lesser than a)