If Stock a Is Considered to Be of Average Risk

question 32

Multiple Choice

If Stock A is considered to be of average risk for the market and Stock B is also considered of average risk for the market, then the

• A) standard deviation for each of the stocks will be equal
• B) beta for each of the stocks will be equal
• C) coefficient of variation for each of the stocks will be equal
• D) cannot determine from the information given

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Definitions:

Consumption

Refers to the use of goods and services by households.

Utils

An imaginary unit of measurement used in economics to represent the satisfaction or utility received from consuming goods and services.

Marginal Utility

An additional amount of satisfaction gained from consuming an extra unit of a good, highlighting the concept of diminishing returns.

Total Utility

The total satisfaction received from consuming a certain amount of goods or services.