Stocks a and B Both Have an Expected Return of 10

question 23

Multiple Choice

Stocks A and B both have an expected return of 10% and a standard deviation of returns of 25%.Stock A has a beta of 0.8 and Stock B has a beta of 1.2.The correlation coefficient, r, between the two stocks is 0.6.Portfolio P has 50% invested in Stock A and 50% invested in B.Which of the following statements is CORRECT?

• A) Based on the information we are given, and assuming those are the views of the marginal investor, it is apparent that the two stocks are in equilibrium.
• B) Portfolio P has more market risk than Stock A but less market risk than B.
• C) Stock A should have a higher expected return than Stock B as viewed by the marginal investor.
• D) Portfolio P has a coefficient of variation equal to 2.5.
• E) Portfolio P has a standard deviation of 25% and a beta of 1.0.

Comprehend the importance of a public relations and communications specialist in managing corporate social responsibility, particularly for large corporations.

Recognize the strategic use of public relations in promoting corporate events and initiatives.

Distinguish between cause promotions and corporate philanthropy through specific business models.

Differentiate between cause promotions and cause-related marketing, including their effects on corporate social responsibility.

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Definitions:

Conversion Disorder

A disorder in which anxiety or unconscious conflicts are “converted” into physical symptoms that often have the effect of helping the person cope with anxiety or conflict.

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A mental health condition triggered by experiencing or witnessing a terrifying event, characterized by flashbacks, nightmares, and severe anxiety.