Which of the Following Statements Is Correct

question 64

Multiple Choice

Which of the following statements is correct?

• A) If the returns on a stock could vary widely,and its standard deviation is large,then the stock will necessarily have a large beta coefficient.
• B) A stock that is more highly positively correlated with "The Market" than most stocks would not necessarily have a beta coefficient that is greater than 1.0.
• C) A stock's standard deviation of returns is a measure of the stock's "stand-alone" risk,while its coefficient of variation measures its risk if the stock is held in a portfolio.
• D) A portfolio that contained 100 low-beta stocks would be riskier than a portfolio containing 100 high-beta stocks.
• E) Negative betas cannot exist;if you calculate one,you made an error.

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Definitions:

Checklist

A list of items or tasks that are checked off as they are completed or noted; often used for systematic verification or assessment.

Organizational Psychology

A field of psychology that studies human behavior in workplace settings and applies psychological theories and principles to organizations.

Personnel Psychology

A branch of psychology focused on the workplace, dealing with issues such as hiring, assessment, and motivation of employees.

Human Factors Psychology

A field of psychology focusing on designing products and creating work environments that complement the human body and psychological capabilities.