If Stock a Is Considered to Be of Lower Risk

question 11

Multiple Choice

If Stock A is considered to be of lower risk than Stock B, then Stock A should have returns that are

• A) lower than Stock B
• B) higher than Stock B
• C) they would have equal returns
• D) cannot determine from the information given

---

Definitions:

Price Elasticity of Demand

An indicator of consumer sensitivity to price fluctuations, represented by the degree to which the demand for a product varies in response to alterations in its price.

Absolute Value

The distance of a number from zero on a number line, without considering its direction; always a positive number or zero.

Cookies

Small files stored on a user's computer or device by a website, containing data about the user's browsing activities.

Price Elasticity of Demand

The degree to which the quantity demanded of a good changes in response to a change in its price.