Which of the Following Statements Is Correct

question 64

Multiple Choice

Which of the following statements is correct?

• A) If the returns on a stock could vary widely,and its standard deviation is large,then the stock will necessarily have a large beta coefficient.
• B) A stock that is more highly positively correlated with "The Market" than most stocks would not necessarily have a beta coefficient that is greater than 1.0.
• C) A stock's standard deviation of returns is a measure of the stock's "stand-alone" risk,while its coefficient of variation measures its risk if the stock is held in a portfolio.
• D) A portfolio that contained 100 low-beta stocks would be riskier than a portfolio containing 100 high-beta stocks.
• E) Negative betas cannot exist;if you calculate one,you made an error.

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Definitions:

Zygote

The initial cell formed when a sperm cell fertilizes an egg cell, marking the beginning of pregnancy.

Observable Characteristics

Traits or features of an organism that can be seen or measured directly.

Phenotypes

The observable characteristics or traits of an organism resulting from the interaction of its genetic makeup and its environment.

Genotypes

The genetic makeup of an organism that determines a specific characteristic or trait.