Stock X Has 3 Units of Systematic Risk and 2

question 58

Multiple Choice

Stock X has 3 units of systematic risk and 2 units of unsystematic risk while Stock Y has 3 units of systematic risk and 4 units of unsystematic risk.If Stock X is priced to generate an 8% return for investors then what do we know about the return that Stock Y should be priced to return?

• A) Stock Y should be priced to return greater than 8%
• B) Stock Y should be priced to return 8%
• C) Stock Y should be priced to return less than 8%
• D) there is not enough information to solve this problem

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Definitions:

Integrative Agreements

Integrative agreements are solutions in negotiations that involve collaborative efforts to find mutually beneficial outcomes, often by expanding the resources or options available.

Primary Reason

The main or most important cause or motive behind an action or event.

Negotiators

Individuals or parties involved in a discussion aimed at reaching an agreement or resolving a problem.

Personal Preferences

Personal preferences are individual tastes, inclinations, or choices, reflecting subjective values or desires in various aspects of life.