A Considerable Scattering in the Plot of Points Representing the Historic

question 108

Multiple Choice

A considerable scattering in the plot of points representing the historic returns of a stock versus the returns on the market indicates the:

• A) high beta of the stock.
• B) unique risk of the stock.
• C) changes in market risk premium over time.
• D) current underpricing of the stock.

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Definitions:

Population Mean

The average value of all the members of a set or population.

Probability

The determination of the odds that an event will happen, shown as a number from 0 to 1.

Sample Mean

The average of all the values in a sample, used as an estimate of the population mean.

Population Mean

The average value of all elements in a population, where the population represents the entire set of items or individuals being studied.