AAA Company Stock Has a Higher Expected Rate of Return

question 48

Multiple Choice

AAA Company stock has a higher expected rate of return than ZZZ Company stock.All else being equal,you would expect that relative to ZZZ,AAA company stock provides

• A)less risk and less liquidity.
• B)less risk and more liquidity.
• C)more risk and less liquidity.
• D)more risk and more liquidity.

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Definitions:

API Gravity

A measure used to quantify the density of petroleum liquids relative to water, as defined by the American Petroleum Institute.

Price Per Barrel

The cost of a barrel of goods, commonly used in reference to crude oil prices in the commodities market.

Outlier

An observation in a dataset that is distant from other observations such that it appears to deviate markedly from other members of the sample.

Autocorrelation

The correlation of a signal with a delayed copy of itself as a function of delay.