Which of the Following Statements Is CORRECT

question 128

Multiple Choice

Which of the following statements is CORRECT?

• A) If a stock has a beta of to 1.0,its required rate of return will be unaffected by changes in the market risk premium.
• B) The slope of the Security Market Line is beta.
• C) Any stock with a negative beta must in theory have a negative required rate of return,provided rRF is positive.
• D) If a stock's beta doubles,its required rate of return must also double.
• E) If a stock's returns are negatively correlated with returns on most other stocks,the stock's beta will be negative.

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Definitions:

Autoranging

A feature in electronic measurement devices that automatically adjusts the range for the best measurement scale.

DMMs

Digital Multimeters, versatile instruments used to measure electric voltage, current, resistance, and other values in circuits and systems.

Fluke Meters

Brand-specific electronic measuring instruments used for various electrical measurements, known for their reliability and precision.

Central Processing Unit (CPU)

Solid-state device used to manage the processing cycle in a computer. It performs arithmetic and logic computations, arranges data in the processing cycle by fetch and carry from data banks, and generates output commands. It is the “brain” of the processing cycle.