Which of the Following Is Correct Regarding the Total Risk

question 113

Multiple Choice

Which of the following is correct regarding the total risk of a stock?

• A)The total risk of a stock is the stock's market and duration risks.
• B)The total risk of a stock is the stock's variance in price and its dividend yield.
• C)The total risk of a stock is the stock's market and diversifiable risks.
• D)The total risk of a stock is the stock's market and systematic risks.

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Definitions:

Normal Curve

A symmetrical bell-shaped graph that represents the distribution of data in which most values cluster around a mean value.

Standard Normal Probability Distribution

A normal distribution with a mean of zero and a standard deviation of one.

Probability Density Function

A function that describes the relative likelihood for a random variable to take on a given value.

Continuous Random Variable

A type of random variable that can take an infinite number of possible values, often representing measurements on a continuous scale.