If Returns on Stock a Are More Volatile Than the Returns

question 59

Multiple Choice

If returns on stock A are more volatile than the returns on stock B, the geometric average return of stock A will be ________ the geometric average return of stock B when their arithmetic average returns are same.

• A) same as
• B) higher than
• C) lower than
• D) always same as

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Definitions:

Hidden Negative

An implicit or not immediately apparent disadvantage or downside in a situation or proposal.

Negative Connotations

Words or phrases that carry a negative implication or evoke undesirable associations or emotions.

Positive Emphasis

The strategy of highlighting beneficial or optimistic aspects of a situation, proposal, or product to persuade or influence.

Negative Information

Unfavorable data or news that might impact perceptions or decisions adversely.