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:

Price Paid

The amount of money exchanged for a product or service at the time of purchase.

Quantity Sold

The total number of units of a product or service purchased by consumers over a specific period.

Price Ceiling

A legally established maximum price that can be charged for a good or service, aimed at preventing prices from rising too high.

Creates Shortage

A market condition where the quantity demanded exceeds the quantity supplied at a given price, often due to price controls like price ceilings.