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

---

Definitions:

Optimal Combination

The best mix of different factors or elements (such as resources or inputs) to achieve a desired outcome or objective.

Inputs

The resources used in the production process, including labor, raw materials, and capital.

Least Costly

Refers to the option that requires the smallest amount of expense or effort to achieve a given outcome.

Perfectly Competitive

A market structure characterized by a large number of small firms, a homogeneous product, and free entry and exit, leading to efficient outcomes.