If the _____________ of a Stock Is Known, an Investor

question 104

Multiple Choice

If the _____________ of a stock is known, an investor can use the security market line to determine the expected return on that stock.

• A) standard deviation
• B) beta
• C) coefficient of variation
• D) unsystematic risk

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the number of units produced.

Marginal Cost

The rise in production costs when one more unit of a product or service is produced.

Long-Run Equilibrium

A state in which a market or economy has adjusted to all internal and external changes and forces, resulting in no incentive for allocation or production adjustments.

Rational Criterion

A standard or principle for making decisions based on logical and coherent reasoning, aimed at achieving the best possible outcome.