Question

The $LaTeX: \beta$β and standard deviation of Numout Gold Mining, SuperValu, Symtec, and Acme Motor common stock are given in the following table:

Company	$LaTeX: \beta$β	Standard Deviation
Gold Fields	-0.64	17.14%
Kroger	0.89	8.93%
Align Technology	2.71	13.80%
PepsiCo	0.56	5.98%

A. Which stock is the riskiest to an undiversified investor who puts all of her funds in one of these stocks?

B. Which stock is the riskiest to a well-diversified investor?

Answer 1

Gold Fields is riskiest to an undiversified investor because it has the highest standard deviation

Align Technology is riskiest to a well-diversified investor because it has the highest beta