Stock a Has a Beta of 0

question 12

Multiple Choice

Stock A has a beta of 0.8 and Stock B has a beta of 1.2. Fifty percent of Portfolio P is invested in Stock A and 50% is invested in Stock B. If the market risk premium (rM - rRF) were to increase but the risk-free rate (rRF) remained constant, which of the following would occur?

• A) The required return will increase for both stocks but the increase will be greater for Stock B than for Stock A.
• B) The required return will decrease by the same amount for both Stock A and Stock B.
• C) The required return will increase for Stock A but will decrease for Stock B.
• D) The required return on Portfolio P will remain unchanged.

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Definitions:

E75.02

A specific code used in the ICD-10 classification system to designate Type 2 Gaucher disease.

Current Condition

A term referring to the existing state of health or illness of a patient at a given point in time.

Physician Wrote

Pertains to documentation or prescriptions that medical doctors have written or authorized.

Patient Visit

An encounter between a patient and a healthcare provider in which advice, consultation, or treatment is provided.