Use the Information for the Question(s)below

question 5

Multiple Choice

Use the information for the question(s) below.
Suppose that in the coming year,you expect Exxon-Mobil stock 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

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Definitions:

Director

An individual appointed to serve on the board of an organization, responsible for overseeing and guiding the organization's policies, finances, and operations.

Promissory Note

A financial instrument that contains a written promise by one party to pay another a definite sum of money either on demand or at a future specific date.

Fiduciary Duty

A duty required by law for one entity to prioritize the welfare of another while managing their finances, assets, or private data when given such responsibility.

Oppression Provision

Legal measures designed to protect minority shareholders in a company from unfair treatment by the majority.