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The riskier an investment is, the greater the return demanded by investors. Company A and...

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Finance

The riskier an investment is, the greater the return demanded by investors. Company A and Company B are identical in almost every way (e.g. expected values of future returns are identical for both companies with one exception: Investors believe that company A's returns carry greater risk than Company B's returns. That is Company A is a riskier investment than Company B. Under this scenario, which company's stock price will be greater (with all other things being equal )?

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