If We Are Able to Fully Diversify,what Is the Appropriate

question 141

Multiple Choice

If we are able to fully diversify,what is the appropriate measure of risk to use?

• A) Expected Return
• B) Standard Deviation
• C) Beta
• D) Risk-free Rate of Return

Identify and describe the primary financial statements and their characteristics.

Apply the business entity assumption in various contexts.

Explain the measurement principle and the monetary unit assumption.

Determine the correct recording of transactions according to the cost principle.

---

Definitions:

Common Stock

Equity securities that represent ownership in a company, usually accompanied by voting rights and potential for dividends.

Dividends

Money distributed from a company's profits to its owners or investors.

Stock Dividend

A dividend payment made in the form of additional shares rather than cash, often used by companies to conserve cash.

Market Price

The present cost at which a service or asset is available for purchase or sale in a specific market.