You Sell Some of Your Chapters Common Stock (Which Tends

question 301

Multiple Choice

You sell some of your Chapters common stock (which tends to move up and down with the economy as a whole) and replace it with the common stock of El Dorado Gold Mining, Inc. (whose shares tend to rise when the economy falls, and vice versa) . Your portfolio's beta should _______________.

• A) Increase.
• B) Decrease.
• C) Remain unchanged.
• D) Either increase or decrease.
• E) Definitely exceed the beta of the market when all is said and done.

---

Definitions:

Variability

The degree of spread or dispersion within a set of data points or values, reflecting how much the data points differ from each other.

Mode

The value that appears most frequently in a data set, representing the most common outcome or observation.

Correlated

When two or more variables are related in some way, showing a tendency to vary together, implying a relationship or association between them.

Research Study

An organized process of inquiry, encompassing the development of research, experimentation, and assessment, aimed at creating or enhancing universally applicable insights.