You Expect General Motors (GM) to Have a Beta of 1.5

question 58

Multiple Choice

You expect General Motors (GM) to have a beta of 1.5 over the next year and the beta of Exxon Mobil (XOM) to be 1.9 over the next year. Also, you expect the volatility of General Motors to be 50% and that of Exxon Mobil to be 35% over the next year. Which stock has more systematic risk? Which stock has more total risk?

• A) XOM, GM
• B) GM, XOM
• C) GM, GM
• D) XOM, XOM

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Definitions:

Budgeted Beginning Inventory

The estimated value or quantity of inventory that a company plans to have on hand at the start of a period.