Problem: 1. Why is it important to focus on total returns when measuring an investment's performance?
Problem 2: Stock A has a beta of 1.5, and stock B has a beta of 1.0. Determine whether each of the statements below is true or false.
a. Stock A must have a higher standard deviation than Stock B.
b. Stock A has a higher expected return than Stock B.
c. The expected return on Stock A is 50 percent higher than the expected return on B.