You Observe the Following Information Regarding Companies X and Y

question 102

Multiple Choice

You observe the following information regarding Companies X and Y: ∙
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.
Given this information, which of the following statements is CORRECT?

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

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Definitions:

Cephalocaudal Development

A pattern of growth where physical development starts from the head and moves towards the feet.

Embryo

An early stage of development in multicellular organisms, in humans, it refers to the period from fertilization until the eighth week of pregnancy.

Top Down

A processing approach where perception starts with the input of a general idea or framework before breaking down into smaller components.

Radiation

The emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles that cause ionization.