Which One of the Following Has the Highest Expected Risk

question 39

Multiple Choice

Which one of the following has the highest expected risk premium?

• A)stock portfolio with a beta of 1.06
• B)U.S. Treasury bill
• C)individual stock with a beta of 1.46
• D)a stock mutual fund with a beta of .89
• E)individual stock with a beta of .94

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Definitions:

Industry Expands

This phrase describes the process where the total output or the number of firms in a given industry increases due to factors such as innovation, increased demand, or favorable policies.

Long Run

A period in economic analysis where all factors of production are variable, allowing for complete industry adjustment.

Industry Supply

The total output of goods or services that firms in a specific industry are willing and able to sell at various prices, over a certain period of time.