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:

Hemineglect

A neurological condition, also known as unilateral neglect, where a patient is unable to perceive or respond to stimuli on one side of their body or environment.

Parietal Lobes

Regions of the cerebral cortex in front of the occipital lobes and behind the frontal lobes; these regions are important for the sense of touch and for picturing the layout of spaces in an environment.

Left Hemisphere

The left side of the human brain, associated with analytical thought processes, language, and logic.

Frontal Lobes

Regions of the cerebral cortex at the front of the brain; these regions are important for movement and complex processes (rational thought, attention, social processes, etc.).