Which of the Following Statements Is Most Correct About a Stock

question 58

Multiple Choice

Which of the following statements is most correct about a stock which has a beta = 1.2?

• A) If the stock's beta doubles its expected return will double.
• B) If expected inflation increases 3 percent, the stock's expected return will increase by 3 percent.
• C) If the market risk premium increases by 3 percent the stock's expected return will increase by less than 3 percent.
• D) Answers a, b, and c are correct.
• E) Answers b and c are correct.

---

Definitions:

Definitions

Detailed explanations of the meanings, implications, and specifics of words, terms, or concepts.

Leadership

The ability to influence and coordinate the efforts of others towards the accomplishment of specific objectives.

Research

The systematic investigation and study of materials and sources to establish facts and reach new conclusions.

Definitions

Precise explanations of the meaning of words or concepts.