The Risk Premium Would Be Greater for an Investment in an Oil

question 71

Multiple Choice

The risk premium would be greater for an investment in an oil and gas exploration in unproven fields than an investment in preferred stock because

• A) oil and gas exploration investments have a greater variability in possible returns.
• B) the preferred stock is more liquid.
• C) the inflation rate would vary more with oil and gas exploration investments.
• D) both A and B

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