Suppose Stock X Has a Beta of 2

question 197

Multiple Choice

Suppose stock X has a beta of 2.5 and stock Y has a beta of 0.5.From this we can conclude that X has

• A)5 times the nondiversifiable risk of the market portfolio.
• B)5 times the nondiversifiable risk of Y.
• C)2.5 times the nondiversifiable risk of Y.
• D)2.5 times the diversifiable risk of the market portfolio.

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Definitions:

Rural Activities

Economic, social, and recreational activities that take place in countryside areas, often related to agriculture, forestry, or small-scale manufacturing.

Not-for-Profit Organizations

Organizations that function not to generate profit but primarily concentrate on objectives related to social, educational, or charitable activities.

Public Service

Services provided by the government to its citizens, often focusing on essential services like healthcare, education, and security.

Maximized Government Participation

A policy or approach where the government actively engages in various sectors of the economy, often including owning or regulating businesses and industries.