You Are Recalculating the Risk of ACE Stock in Relation

question 37

Multiple Choice

You are recalculating the risk of ACE stock in relation to the market index, and you find that the ratio of the systematic variance to the total variance has risen. You must also find that the ________.

• A) covariance between ACE and the market has fallen
• B) correlation coefficient between ACE and the market has fallen
• C) correlation coefficient between ACE and the market has risen
• D) unsystematic risk of ACE has risen

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Definitions:

Ethical Standards

The principles that guide behavior in terms of right and wrong, often formalized in codes of conduct.

Ethical Principles

Fundamental norms that guide behavior and actions in a moral light, such as honesty, fairness, and integrity.

Specific Behavior

A particular or distinct action or pattern of actions exhibited by an individual or group.

Rationalization Strategy

A methodological approach in management to make business operations more efficient by systematically organizing resources and processes.