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As a financial manager, you found that capital market is very risky and volatile. As...

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Finance

As a financial manager, you found that capital market is very risky and volatile. As we know that the firms Beta () measures the volatility, or systematic risk, of a security, as it compares to the broader market. The higher the firms Beta, the higher the securitys risk, as it compares to the broader market. However, the shareholders of your firm heard about another firm with negative Beta, and they are confused now. The shareholders of your firm would like to know if a firm can have a negative beta. If yes, what would the expected return on such a firm be? Why? Please explain your reasoning by providing quality argument. (4 Points) Type answer

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