Stock a Has a Beta of 1

question 95

Multiple Choice

Stock A has a beta of 1.2 and a standard deviation of 25%.Stock B has a beta of 1.4 and a standard deviation of 20%.Portfolio AB was created by investing in a combination of Stocks A and B.Portfolio AB has a beta of 1.25 and a standard deviation of 18%.Which of the following statements is correct?

• A)Stock A has more market risk than Portfolio AB.
• B)Stock A has more market risk than Stock B but less stand-alone risk.
• C)Portfolio AB has more money invested in Stock A than in stock B.
• D)Portfolio AB has the same amount of money invested in each of the two stocks.

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Definitions:

Psycholinguistic Theory

The view that language learning involves an interaction between environmental influences and an inborn tendency to acquire language. The emphasis is on the inborn tendency.

Sensitive Periods

Specified times in development when the brain is particularly receptive to learning certain skills or knowledge.

Language Acquisition Device

A theoretical construct in linguistics proposed by Noam Chomsky, suggesting an innate faculty that allows humans to acquire language.

LAD

Can refer to several meanings; without context, this term cannot be accurately defined.