Which of the Following Statements Is More Likely to Be

question 65

Multiple Choice

Which of the following statements is more likely to be correct concerning the statement, "Stock A has a higher expected return than Stock B"?

• A)Stock A has more unique risk.
• B)Stock B plots below the security market line.
• C)Stock B is a cyclical stock.
• D)Stock A has a higher Beta.

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Definitions:

Option's Value

The intrinsic and time value associated with an options contract, determining its worth on the market.

Option

A financial derivative that provides the buyer the right, but not the obligation, to buy or sell an asset at an agreed-upon price within a certain period.

Lower Bound

The minimum level that an economic or financial variable can achieve, often used in the context of interest rates.

Fixed Price

A fixed price is a set cost for goods or services that does not change in response to market fluctuations or differing quantities purchased.