Assume the Beta for the Stock Market in General Is

question 74

Multiple Choice

Assume the beta for the stock market in general is 1.0 and that the beta for World-Wide Television Productions is 2.4.Which of these statements is not true?

• A)The average stock is less risky than World-Wide Television Productions stock.
• B)World-Wide Television Productions stock is more risky than the average stock.
• C)Beta compares the risk of a specific stock issue with the risk of the stock market in general.
• D)Most stocks have betas between 0.5 and 2.
• E)World-Wide Television Productions stock is less risky than the average stock.

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Definitions:

Exponential Distribution

A constant probability distribution that models the time intervals between occurrences in a process where events happen continuously, independently, and at a steady average rate.

Density Function

A function that describes the likelihood of a random variable to take on a given value, often used in the context of continuous probability distributions.

F(x)

Generally refers to a function of x, which might denote a variety of mathematical relationships depending on the context.

Exponential Distribution

Exponential distribution is a continuous probability distribution used to model the time between events in a Poisson process, characterizing occurrences that happen independently and at a constant average rate.