Use the Information for the Question(s)below

question 7

Multiple Choice

Use the information for the question(s) below.
Suppose that in the coming year,you expect Exxon-Mobil stock to have a volatility of 42% and a beta of 0.9,and Merck's stock to have a volatility of 24% and a beta of 1.1.The risk-free interest rate is 4% and the market's expected return is 12%.
-Which stock has the highest total risk?

• A)Merck since it has a lower volatility
• B)Merck since it has a higher beta
• C)Exxon-Mobil since it has a higher volatility
• D)Exxon-Mobil since it has a lower beta

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Definitions:

Anorexia Nervosa

A serious mental health disorder characterized by an individual's refusal to maintain a healthy body weight, an intense fear of gaining weight, and a distorted body image.

Terrified

A state of intense fear or anxiety, often resulting from exposure to perceived threats or danger.

Starves

The condition of suffering or dying from a lack of food.

Bipolar Disorder

A psychiatric disorder characterized by extreme mood swings, including manic (high) and depressive (low) episodes, affecting a person's energy, activity levels, and ability to carry out day-to-day tasks.