Which of the Following Statements Is Most Correct

question 83

Multiple Choice

Which of the following statements is most correct?

• A) The slope of the security market line is beta.
• B) A stock with a negative beta must have a negative required rate of return.
• C) If a stock's beta doubles its required rate of return must double.
• D) If a stock has a beta equal to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
• E) None of the above statements is correct.

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Definitions:

Concurrent Validity

A measure of how well a particular test correlates with a previously validated measure, assessed at the same point in time.

Thinking

The process of considering or reasoning about something, involving the manipulation of information to solve problems, make decisions, or engage in creative processes.

Personality Inventory

A questionnaire or other standardized instrument designed to reveal aspects of an individual's character or psychological makeup.

Behaving

Demonstrating actions or conduct in response to specific stimuli or environments.