Which One of These Stocks Is Most Apt to Have

question 73

Multiple Choice

Which one of these stocks is most apt to have the highest (least negative) rate of return assuming that each stock has a negative total return for the period?

• A)High-dividend,high standard deviation stock
• B)No dividend,high standard deviation stock
• C)High-dividend,low standard deviation stock
• D)Low-dividend,high standard deviation stock
• E)Low-dividend,low standard deviation stock

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Definitions:

Normal Good

A type of good for which demand increases as consumer income rises, and decreases as consumer income falls.

Income Elasticity

Income elasticity of demand measures how much the quantity demanded of a good changes as consumer income changes.

Low-quality Beef

This refers to beef that does not meet certain standards of texture, flavor, or nutritional value.

Cross-price Elasticity

Cross-price elasticity measures how the quantity demanded of one good responds to a change in price of another good, indicating the degree of substitutability or complementarity between them.