Which of the Following Statements Is TRUE

question 79

Multiple Choice

Which of the following statements is TRUE?

• A)Portfolios with lower volatility have historically rewarded investors with higher average returns.
• B)Individual stocks with higher volatility have consistently rewarded investors with higher average returns.
• C)Volatility seems to be a reasonable measure of risk when evaluating returns on large portfolios.
• D)Volatility seems to be a reasonable measure of risk when evaluating returns on individual stocks.

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Definitions:

Marginal Expenditure

The added financial outlay involved in purchasing one more unit of a product or service.

Monopsony Wage Rate

The wage rate determined in a market where there is only one buyer of labor, giving this buyer significant power over the wage rate.

Economic Rents

Extra earnings above the minimum level required to keep a resource in its current use, often associated with scarce resources or monopolistic markets.

Non-Union Workers

Employees who are not members of a labor union and typically do not receive the collective bargaining benefits that unionized workers do.