According to the Following Information, Which of the Shares Would

question 26

Multiple Choice

According to the following information, which of the shares would be considered riskiest in a diversified portfolio of investments?

• A) Share MNO, because it has the highest standard deviation.
• B) Share TUV, because it has the highest beta.
• C) Share FGH, because it has the highest s/b ratio
• D) Share ABC, because its beta is the same as the market beta (1.0) and the market is always very, very risky.

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Definitions:

Conditioned Stimulus

A neutral stimulus that, once it becomes linked with an unconditioned stimulus, ultimately leads to eliciting a conditioned response.

Unconditioned Stimulus

A stimulus that innately prompts a reaction without the necessity for prior conditioning.

Stimulus Generalization

The process by which conditioned responses are triggered by stimuli that are similar, but not identical, to the original conditioned stimulus.

Reinforcer

A stimulus or event that increases the probability of the repeated occurrence of a behavior that it follows, often used in the context of operant conditioning.