Meb Owns Stock in Two Similar, Large, fiNancially Sound Corporations

question 19

Multiple Choice

Meb owns stock in two similar, large, financially sound corporations. Company A consistently earns rates of return of 12 percent per year, while company B regularly generates rates of return of 8
Percent per year. If Meb is attempting to arbitrage, he will

• A) sell his stock in company B and buy more stock in company A.
• B) sell his stock in company A and buy more stock in company B.
• C) keep his portfolio balanced with an equal or nearly equal number of shares of each stock.
• D) buy stock in other companies in an effort to diversify and minimize risk.

---

Definitions:

Minor Surgery

Surgical procedures that are less invasive and typically carry a lower risk, often performed in an outpatient setting.

Betadine

A brand name for a type of antiseptic used to prevent infection in wounds, containing the active ingredient povidone-iodine.

Preoperative Instruction

Guidelines given to patients before surgery, which may include dietary restrictions, medication rules, and what to expect during and after the procedure.

Minor Surgical Procedure

A medical intervention that is less invasive, often performed on an outpatient basis and requires minimal recovery time.