Stock a Has a Required Return of 19

question 10

Multiple Choice

Stock A has a required return of 19%. Stock B has a required return of 11%. Assume a risk-free rate of 4.75%. Which of the following is a correct statement about the two stocks?

• A) Stock A is riskier.
• B) Stock B is riskier.
• C) The stocks have the same risk.
• D) We would need to know if the markets are efficient to answer this question.

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Definitions:

Transference

In psychoanalysis, the tendency for a patient or client to project positive or negative feelings for important people from the past onto the therapist.

Countertransference

In psychotherapy, it refers to the emotions and projections that the therapist may feel towards the patient.

Free Association

A psychoanalytic process in which patients express their thoughts freely, letting their mind wander without censorship, to uncover unconscious thoughts and feelings.

Fear of Women

An irrational fear or aversion to women, known as gynophobia.