Use the Information for the Question(s)below

question 90

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 total risk?

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

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Definitions:

Stimulus

A stimulus is any external or internal change that influences the activity of an organism or any of its parts, leading to a physiological response.

Differentiation

The process by which cells or tissues undergo a change toward a more specialized form or function, often in the context of development.

Metabolism

The set of life-sustaining chemical reactions in organisms that allows them to grow, reproduce, maintain their structures, and respond to their environments.

Growth

The process of increasing in size, number, value, or strength.