In a Stock Market, a Riskier Stock Typically Has

question 155

Multiple Choice

In a stock market, a riskier stock typically has:

• A)a higher covariance with the market as a whole.(True Answer )Correct
• B)a lower covariance with the market as a whole.
• C)a higher correlation with some stocks and a lower correlation with other stocks.
• D)a lower correlation with the market as a whole.

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Definitions:

Total Surplus

The sum of consumer and producer surplus, representing the total net benefit to society from the production and consumption of a good or service.

Deadweight Loss

A societal expense caused by disruptions in the marketplace, happening when there's a discrepancy between supply and demand levels.

Free-Trade Policy

A policy to eliminate import/export restrictions or tariffs among countries, facilitating a more free flow of goods and services across borders.

Exporting Steel

The process of producing steel in one country and selling it to buyers in another country.