Which one of the following stocks has the highest expected risk premium?
$\begin{array}{lcr}
\text { Stock}& \text { Standard deviation }&\text { Beta }\
\text { A } & 148 & 1.36 \
\text { B } & 21 & .98 \
\text { C } & 34 & 1.02 \
\text { D } & 8 & 1.18\
\text { E }&17&1.27
\end{array}$
A)A
B)B
C)C
D)D
E)E

Question

Quizplus · Accepted Answer

The expected risk premium of a stock is more closely related to its beta rather than its standard deviation. Beta measures a stock's volatility in relation to the market. A higher beta indicates a higher expected risk premium. Stock A has the highest beta (1.36), suggesting it has the highest expected risk premium.

Which One of the Following Stocks Has the Highest Expected