You Are Considering Investing in One of the These Three

question 114

Multiple Choice

You are considering investing in one of the these three stocks: $$\begin{array} { c c c } \text { Stock } & \text { Standard Deviation } & \text { Beta } \\\text { A } & 20 \% & 0.59 \\\text { B } & 10 \% & 0.61 \\\text { C } & 12 \% & 1.29\end{array}$$ If you are a strict 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; A.
• C) C; A.
• D) C; B.
• E) A; A.

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Definitions:

Inter-leaf Friction

The resistance encountered between the leaves of a multi-leaf spring, contributing to the spring's damping characteristics.

Air Suspension

Air suspension is a type of vehicle suspension powered by an electric or engine-driven air pump or compressor, which inflates flexible bellows to adjust the car's level, reduce the effect of shock forces, and improve ride quality.

Regulated Pressure

The control or maintenance of pressure levels within specific limits in a system, achieved through the use of valves, regulators, or other controlling devices.

Axle Saddle

is a part of a vehicle's chassis that supports the axle, allowing it to bear the weight of the vehicle as well as enabling smooth movement and load distribution across the axle.