Which of the Following Stocks Has the Greatest Total Risk

question 87

Multiple Choice

Which of the following stocks has the greatest total risk? $\begin{array}{c}\begin{array}{lll}\\ \text { Stock A}\\ \text { Stock B}\\ \text { Stock C}\\ \text { Stock D}\end{array}\begin{array}{c} \text {Standard deviation}\\62 \% \\47 \% \\53 \% \\59 \% \%\end{array}\begin{array}{lll} \text {Beta}\\ 1.10 \\ 1.05 \\1.30 \\0.90\end{array}\end{array}$

• A) Stock A
• B) Stock B
• C) Stock C
• D) Stock D
• E) Insufficient information.

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Definitions:

Dollar-Denominated Deposits

Bank deposits made in U.S. dollars rather than the local currency, often used by investors to avoid foreign exchange rate risk.

Foreign Bank

A bank based in a country other than the country it provides services in, often subject to both domestic and international banking regulations.

Value-Weighted Index

An index in which the weight of each constituent is proportional to its market value, emphasizing larger companies.

Price-Weighted Index

A stock market index in which each company's influence on the index's performance is proportional to its stock price.