A Stock's Total Risk Depends on the Stock's _________ and __________

question 44

Multiple Choice

A stock's total risk depends on the stock's _________ and __________.

• A) beta; specific risk
• B) beta; market risk
• C) specific risk; firm-specific risk
• D) aggressive risk; defensive risk

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Definitions:

Leverage

The use of borrowed capital or financial instruments to increase the potential return of an investment.

Borrows Money

The act of receiving funds from another party under the agreement to return the principal amount along with interest or other charges.

Shares

A form of financial ownership in a company, giving the holder a portion of the profits and voting rights.

CEO

Chief Executive Officer, the highest-ranking person in a company or organization, responsible for making major corporate decisions.