Which Security Has the Greatest Expected Return

question 328

Multiple Choice

Which security has the greatest expected return?

• A) Y because it has the largest standard deviation.
• B) X because it has the largest beta coefficient.
• C) Z because it has the highest ratio of standard deviation to beta.
• D) Y because it has the lowest beta coefficient, and therefore the lowest risk.
• E) It is not possible to tell given the information above.

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Definitions:

Financial Problems

Issues related to managing money, including difficulties in generating income, managing expenses, or meeting financial obligations.

Benchmark Analysis

A method of comparing business processes and performance metrics to industry bests or best practices from other industries.

Industry Averages

Statistical benchmarks aggregating performance metrics, such as revenue or profits, across companies within a specific industry.

Competitors

Individuals or entities that compete within the same industry or market, offering similar or alternative products or services to the same customer base.