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.

---

Definitions:

Good Genes Hypothesis

A theory in evolutionary biology suggesting that individuals select mates based on traits that indicate genetic quality, leading to offspring with enhanced survival and reproductive success.

Maternal Effects

The influence of the mother’s genotype or phenotype on the phenotype of her offspring, independent of the offspring's own genes.

Dark-eyed Junco

A species of North American birds known for their varying plumage colors but typically having dark eyes, found in forests and urban areas.

Polyandry

A mating system in which a female has multiple male partners during a breeding season.