Which of the Following Statements Is Correct

question 39

Multiple Choice

Which of the following statements is correct?

• A) Well diversified stockholders do not consider corporate risk when determining required rates of return.
• B) Undiversified stockholders, including the owners of small businesses, are more concerned about corporate risk than market risk.
• C) Managers care only about market risk.
• D) Market risk is important but does not have a direct effect on stock price because it only affects beta.
• E) All of the statements above are false.

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Definitions:

Sympathetic Nervous System

Part of the autonomic nervous system that activates the body's fight or flight response to stress or emergency situations.

Digestive Activity

The process of breaking down food by mechanical and enzymatic action in the alimentary canal into substances that can be used by the body.

Sexual Arousal

The physiological and psychological state of being stimulated or excited sexually, which can lead to sexual desire and potentially sexual activity.

Sympathetic Nervous System

Part of the autonomic nervous system that prepares the body for physical activity by speeding up the heart rate, increasing blood pressure, and dilating the pupils, among other actions.