Stock a Has a Coefficient of Variation of 30% and Stock

question 60

Multiple Choice

Stock A has a coefficient of variation of 30% and stock B has a coefficient of variation of 35%.Based on this measure of risk, which stock would be considered riskier?

• A)Stock A
• B)The values are so close, they would be considered to have the same level of risk
• C)Stock B
• D)Risk cannot be measured by the coefficient of variation
• E)There is not enough information to answer

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Definitions:

Marginal Revenue Curve

A graph showing how marginal revenue varies as output quantity changes, important for understanding profit maximization.

Collude

When companies or organizations conspire or work together, often in secret, to control a market or manipulate prices at the expense of fair competition.

Nash Equilibrium

A concept in game theory where no player can gain by changing strategies if the other players keep their strategies unchanged, representing a situation of mutual best responses.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a product or service.