You Have the Following Data on Three Stocks As a Risk Minimizer, You Would Choose Stock ____ If

question 18

Multiple Choice

You have the following data on three stocks: $$\begin{array} { c c c } \text { Stock } & \text { Standard Deviation } & \text { Beta } \\\text { A } & 0.15 & 0.79 \\\text { B } & 0.25 & 0.61 \\\text { C } & 0.20 & 1.29\end{array}$$ As a risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio.

• A) A; B.
• B) B; C.
• C) C; A.
• D) C; B.
• E) A; A.

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Definitions:

Primary Tool

The main instrument or device used to accomplish a task or achieve a goal.

Market Value Ethics

A principle that considers ethical actions in the marketplace as those that maximize the value for all stakeholders involved.

Utilitarianism

is an ethical theory that suggests the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Ethical Relativism

The belief that morality is relative to the norms of one's culture, meaning that what is considered moral in one society may be considered immoral in another.