The Figures Below Show Plots of Monthly Excess Returns for Two

question 57

Multiple Choice

The figures below show plots of monthly excess returns for two stocks plotted against excess returns for a market index.
-Which stock is riskier to a non-diversified investor who puts all his money in only one of these stocks?

• A) Stock A is riskier
• B) Stock B is riskier
• C) Both stocks are equally risky
• D) You cannot tell from the information given.

---

Definitions:

Withhold And Uphold

The act of retaining something while simultaneously maintaining or supporting a particular principle or standard.

Lengel-Daft Contingency Model

A framework suggesting that the effectiveness of information processing and communication in organizations depends on the fit between the complexity of the task and the information richness.

Lean Medium

A method or tool that facilitates efficient and effective communication or project management with minimal waste.

Lengel-Daft Contingency Model

A theoretical framework suggesting that the effectiveness of communication processes and mediums varies according to the uncertainty and complexity of the situation.