An Increase in Nondiversifiable Risk

question 116

Multiple Choice

An increase in nondiversifiable risk

• A) would cause an increase in the beta and would increase the required return.
• B) would cause an increase in the beta and would lower the required return.
• C) would have no effect on the beta and would, therefore, cause no change in the required return.
• D) would cause a decrease in the beta and would, therefore, lower the required rate of return.

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Definitions:

Marx

Karl Marx, a 19th-century philosopher, economist, and revolutionary, known for his theories about capitalism and communism.

Human Right

A fundamental right that is believed to belong to every person, regardless of race, gender, nationality, ethnicity, language, religion, or any other status.

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Subjected to intense physical or mental suffering.

Free Health Care

A health system where medical services are provided at no direct cost to the patient, often funded through taxation or public insurance.