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:

Personality Disorders

Mental health conditions characterized by enduring maladaptive patterns of behavior, cognition, and inner experience, deviating from cultural norms.

Anxiety

A mental health condition characterized by feelings of worry, nervousness, or fear that are strong enough to interfere with one's daily activities.

Eccentricity

Eccentricity refers to unusual or deviating from the recognized or customary character, practice, or pattern, often in a whimsical or peculiar manner.

Impulsivity

The tendency to act on urges and desires without considering the long-term consequences.