Which of the Following Statements Is CORRECT

question 66

Multiple Choice

Which of the following statements is CORRECT?

• A) Portfolio P has a standard deviation of 25% and a beta of 1.0.
• B) Based on the information we are given, and assuming those are the views of the marginal investor, it is apparent that the two stocks are in equilibrium.
• C) Portfolio P has more market risk than Stock A but less market risk than B.
• D) Stock A should have a higher expected return than Stock B as viewed by the marginal investor.

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Definitions:

Standard Error

The standard deviation of the sampling distribution of a statistic, often the mean, representing the accuracy with which a sample approximates a population.

Confidence Interval

A span of values, obtained from sample information, which is expected to encompass the value of an unidentified population characteristic.

Mean

The arithmetic average of a set of values, calculated by adding all the numbers together and dividing by the count of values.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, showing how much the values differ from the mean.