If a Stock Has a Beta Greater Than 1

question 41

Multiple Choice

If a stock has a beta greater than 1.0, it means:

• A) the stock's return has greater than average sensitivity to the market return.
• B) the stock would be an attractive holding during a bear market.
• C) an investor will earn a higher return on the stock than the market returns.
• D) the stock is less risky than the market portfolio.

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Definitions:

More Likely

Indicates a higher probability or chance of something occurring compared to other possibilities.

Counterconditioning

A behavior therapy procedure that uses classical conditioning to evoke new responses to stimuli that are triggering unwanted behaviors.

Conditioned Response

A learned response to a previously neutral stimulus that has become associated with an unconditioned stimulus.

Unwanted Response

A reaction, often in the context of behavior or psychology, that is not desired or intended, sometimes resulting from external stimuli or internal conflicts.