Stock X Has a Lower Beta Than Stock Y

question 26

Multiple Choice

Stock X has a lower beta than Stock Y. The market return for next month is expected to be either -1 percent, +1 percent, or +2 percent with an equal probability of each scenario. The probability distribution of Stock X returns for next month is

• A)the same as that of Stock Y.
• B)more dispersed than that of Stock Y.
• C)less dispersed than that of Stock Y.
• D)zero.

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Definitions:

Sociohistorical Context

The blend of social and historical factors at a specific time that influences behaviors, attitudes, and perceptions.

Empirical

Based on observations or experiences rather than theory or pure logic, often involving the collection and analysis of data.

Bystander Effect

A social psychological phenomenon where individuals are less likely to offer help to a victim when other people are present.

Needed Help

Requires assistance or support, possibly due to facing difficulties or being unable to resolve an issue independently.