Security Y Has a Total Variance of 225

question 3

Multiple Choice

Security Y has a total variance of 225. Its beta is 1.2 and the market variance is 100. The standard deviation of its random error term is

• A) 6%.
• B) 14%.
• C) 3%.
• D) 9%.

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Definitions:

Responsibility

The state or fact of having a duty to deal with something or of having control over someone, often involving ethical or moral obligations.

$100 Check

A written, dated, and signed instrument that directs a bank to pay a specific sum of money, in this case, one hundred dollars, to the bearer or to a specified person.

Citizens Bank

A generic name that can refer to any number of banks operated for the benefit of the citizens in a specific locality.

Teller

An employee of a bank or financial institution responsible for directly interacting with customers, particularly handling deposits and withdrawals.