You Observe the Following Information Regarding Companies X and Y

question 93

Multiple Choice

You observe the following information regarding Companies X and Y:
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-Company X has a higher expected return than Company Y.
-Company X has a lower standard deviation of returns than Company Y.
-Company X has a higher beta than Company Y.
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Given this information,which of the following statements is CORRECT?

• A) Company X has more diversifiable risk than Company Y.
• B) Company X has a lower coefficient of variation than Company Y.
• C) Company X has less market risk than Company Y.
• D) Company X's returns will be negative when Y's returns are positive.
• E) Company X's stock is a better buy than Company Y's stock.

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Definitions:

Specificity

The extent to which something is precisely defined or focused, often used in contexts such as goals, targets, or aspects within research or discussions.

House

A building for human habitation, typically consisting of multiple rooms and intended to be used as a residence.

Without Reserve

An auction term indicating that the item for sale will be sold to the highest bidder, irrespective of the bid amount.

Highest Bidder

In an auction, the person who offers the highest amount of money or value for the item or property being sold.