Question

You are thinking of investing in one of two assets. Asset A has higher systematic risk than asset B. You can be sure that asset A's _______ return will be higher than asset B's, but you can't be sure if asset A's _______ return will be higher than asset B's.

Answer 1

Answer: The correct answers are "expected" and "realized".

Explanation: If Asset A has higher systematic risk than asset B. You can be sure that asset A's expected return will be higher than asset B's, but you can't be sure if asset A's realized return will be higher than asset B's.