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:

Westward Expansion

The 19th-century movement of settlers into the American West, driven by the belief in Manifest Destiny and leading to significant territorial acquisitions and conflicts.

Virginia Plan

A suggestion made by delegates from Virginia for a two-chambered legislative body while creating the United States Constitution in 1787.

Edmund Randolph

An American attorney and politician who served as the first U.S. Attorney General and the seventh Governor of Virginia.

James Wilson

One of the Founding Fathers of the United States and a signatory of the United States Declaration of Independence, as well as a key contributor to the drafting of the U.S. Constitution.