Consider the Following Information for Three Stocks, A, B, and C

question 125

Multiple Choice

Consider the following information for three stocks, A, B, and C, and portfolios of these stocks. The stocks' returns are positively but not perfectly positively correlated with one another, i.e., the correlation coefficients are all between 0 and 1. Portfolio AB has half of its funds invested in Stock A and half in Stock B. Portfolio ABC has one third of its funds invested in each of the three stocks. The risk-free rate is 5%, and the market is in equilibrium, so required returns equal expected returns. Which of the following statements is correct?

• A) Portfolio AB has a standard deviation of 20%.
• B) Portfolio AB's coefficient of variation is greater than 2.0.
• C) Portfolio AB's required return is greater than the required return on Stock A.
• D) Portfolio ABC's expected return is 10.67%.

Recognize the difference between social psychology and other psychological or scientific disciplines.

Identify factors that influence the choice of research methods in social psychology.

Distinguish between the influence of cognitive psychology and other disciplines on social psychology.

Recognize the importance and role of replication in the scientific method.

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Definitions:

Millennials

A generational cohort following Generation X, typically described as those born from the early 1980s to the late 1990s.

Transformational Leadership

A leadership style that inspires and motivates followers to achieve extraordinary outcomes by transforming their beliefs and values.

Psychological Gains

Benefits or improvements in mental health, well-being, or emotional state as a result of specific actions, experiences, or therapeutic interventions.

Laissez-Faire Leader

A leadership style characterized by minimal supervision, where followers are given a high degree of freedom in their decision-making processes.