Use the Information for the Question(s)below

question 82

Multiple Choice

Use the information for the question(s) below.
Suppose that in the coming year,you expect Exxon-Mobil stick to have a volatility of 42% and a beta of 0.9,and Merck's stock to have a volatility of 24% and a beta of 1.1.The risk free interest rate is 4% and the market's expected return is 12%.
-Which stock has the highest systematic risk?

• A)Merck since it has a higher Beta
• B)Exxon-Mobil since it has a lower beta
• C)Exxon-Mobil since it has a higher volatility
• D)Merck since it has a lower volatility