Which One of the Following Has the Highest Expected Risk

question 39

Multiple Choice

Which one of the following has the highest expected risk premium?

• A)stock portfolio with a beta of 1.06
• B)U.S. Treasury bill
• C)individual stock with a beta of 1.46
• D)a stock mutual fund with a beta of .89
• E)individual stock with a beta of .94

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Definitions:

Traumatic Events

Incidents that cause psychological, physical, or emotional harm or distress, often leading to long-term issues.

Belief Perseverance

The tendency to maintain one's beliefs even in the face of contrary evidence.

Euphoria

A feeling or state of intense excitement and happiness.

Gamblers

Individuals who risk something of value, often money, on the outcome of an event or game involving chance.