Stocks A,B,and C Have Identical Risks

question 63

Multiple Choice

Stocks A,B,and C have identical risks.Stock A earns an annual return of 9.9 percent as compared to 9.6 percent returns on stocks B and C.Given this,you can correctly assume that:

• A) Stock A is overpriced.
• B) the market return is 9.75 percent.
• C) Stock A represents the smallest-sized firm.
• D) Stock A has a positive excess return.
• E) Stocks B and C represent firms that are in the process of merging.

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Definitions:

Conspiracy Doctrine

A legal theory that views a combination of workers for the purpose of demanding better working conditions or wages as a criminal conspiracy.

National Labor Relations Act

A foundational U.S. law enacted in 1935 that protects the rights of employees to organize, engage in collective bargaining, and take collective action including strikes.

Commonwealth Vs. Hunt

A landmark 1842 Massachusetts Supreme Court case that ruled labor unions and strikes were lawful.

Railway Labor Act

A United States federal law that was originally enacted in 1926 to replace the existing dispute resolution mechanisms in the railway industry with a more effective and formal process.