If a Stock's Returns Are Volatile, Then the Stock

question 53

Multiple Choice

If a stock's returns are volatile, then the stock:

• A)Cannot be considered a negative risk asset
• B)Can still be considered a negative risk asset
• C)Has macro risk, but no unique risk
• D)Does not offer diversification potential

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Definitions:

Trade Credit

An agreement where a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date.

Venture Capitalist

An investor who provides capital to startup companies and small businesses with perceived long-term growth potential in exchange for equity.

Leverage Advisor

A financial advisor specialized in guiding clients on how to use borrowed funds or leverage to potentially increase investment returns.

Risk-Return Trader

An investor who analyzes the potential return of an investment relative to its risk, aiming to maximize returns while minimizing risks.