Stock a Has a Beta = 0

question 1

Multiple Choice

Stock A has a beta = 0.8, while Stock B has a beta = 1.6. Which of the following statements is most correct?

• A) Stock B's required return is double that of Stock A's.
• B) An equally weighted portfolio of Stock A and Stock B will have a beta less than 1.2.
• C) If market participants become more risk averse, the required return on Stock B will increase more than the required return for Stock A.
• D) All of the answers above are correct.
• E) Answers a and c are correct.

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Definitions:

Scalpel

A small and sharp knife used in surgery or anatomical dissection for cutting tissues.

Infection Chain

A series of steps or conditions necessary for an infectious agent to spread from a source to a susceptible host.

Infectious Agent

Microorganisms or pathogens, such as bacteria, viruses, fungi, or parasites, that can cause disease or infection in humans or animals.

Transmission Mode

The manner in which a pathogen is spread or transferred from one host to another, influencing the spread of infectious diseases.