Which Security Has the Greatest Expected Return

question 273

Multiple Choice

Which security has the greatest expected return?

• A) Y because it has the largest standard deviation.
• B) X because it has the largest beta coefficient.
• C) Z because it has the highest ratio of standard deviation to beta.
• D) Y because it has the lowest beta coefficient, and therefore the lowest risk.
• E) It is not possible to tell given the information above.

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Definitions:

Group Decision

The process through which a collection of individuals collectively arrive at a conclusion or choice.

Decision Unanimity

The condition in which all members of a group or decision-making body agree on a particular decision or outcome.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in irrational or dysfunctional decision-making outcomes.

Self-Censorship

The act of withholding one's own speech or expression due to the fear of social or official repercussions.