Refer to the Data in the Table

question 9

Multiple Choice

$$\begin{array} { | c | c | c | c | } \hline \text { Asset } & \text { Return } & \text { Beta } & \begin{array} { c } \text { Standard } \\\text { Deviation }\end{array} \\\hline \text { A } & 10 \% & 0.74 & 20 \% \\\hline \text { B } & 12 \% & 1.00 & 40 \% \\\hline \text { C } & 14 \% & 1.25 & 30 \% \\\hline\end{array}$$ Refer to the data in the table. Which asset possesses the greatest amount of systematic risk?

• A)A
• B)B
• C)C
• D)Both A and C
• E)Impossible to tell, given the above information

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Definitions:

Average Collection Period

The average number of days it takes for a company to collect payments from its customers, a measure of the efficiency of its credit policies.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations with its short-term assets.

Quick Ratio

A measure of a company's short-term liquidity, calculated as (Current Assets - Inventory) / Current Liabilities, indicating how well a company can meet its short-term financial liabilities.

Days' Sales in Inventory

A financial metric that estimates how long it takes for a company to turn its inventory into sales.