According to the Following Information,which of the Stocks Would Be

question 29

Multiple Choice

According to the following information,which of the stocks would be considered riskiest in a diversified portfolio of investments?

• A) Stock MNO, because it has the highest standard deviation.
• B) Stock TUV, because it has the highest beta.
• C) Stock FGH, because it has the highest s/b ratio
• D) Stock ABC, because its beta is the same as the market beta (1.0) and the market is always very, very risky.

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Definitions:

Systematic Desensitization

A behavioral therapy technique used to reduce phobic responses or anxiety by gradual exposure to the feared object or situation in conjunction with relaxation exercises.

Phobias

Intense, irrational fears of specific objects or situations that significantly affect a person's life.

Progressive Relaxation

A technique involving the tightening and then slowly relaxing of different muscle groups to achieve mental and physical relaxation.

Behavior Therapies

Psychological treatments that focus on changing undesirable behaviors through conditioning and reinforcement.