You Expect General Motors (GM) to Have a Beta of 1

question 86

Multiple Choice

You expect General Motors (GM) to have a beta of 1 over the next year and the beta of Exxon Mobil (XOM) to be 1.2 over the next year. Also, you expect the volatility of General Motors to be 30% and that of Exxon Mobil to be 40% over the next year. Which stock has more systematic risk? Which stock has more total risk?

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

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Definitions:

Manufacturing-Based Quality

A perspective on quality that focuses on adherence to standards and specifications during the manufacturing process.

Assurance

In customer service, it refers to the confidence and trustworthiness demonstrated by a service provider, reassuring customers about the quality of the service or product.

Texas A&M

A public research university in College Station, Texas, known for its strong emphasis on agriculture, engineering, and military science.

L.L. Bean, Inc.

An American retailer recognized for its outdoor recreation merchandise and clothing, known for its customer service and satisfaction guarantee.