A Stock Has an Expected Return of 12% and a Standard

question 32

Multiple Choice

A stock has an expected return of 12% and a standard deviation of 20%. Long-term Treasury bonds have an expected return of 9% and a standard deviation of 15%. Given this data, which of the following statements is correct?

• A) The two assets have the same coefficient of variation.
• B) The stock investment has a better risk-return trade-off.
• C) The bond investment has a better risk-return trade-off.
• D) Both investments have the same diversifiable risk.

Understand the concept of a non-directional hypothesis in correlation analyses.

Analyze the relationship between variables using Pearson and Spearman correlation coefficients.

Understand the concept of interaction effect in factorial research design.

Distinguish between single-factor and factorial research designs.

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