Which of the Following Statements Is Correct

question 5

Multiple Choice

Which of the following statements is correct?

• A) 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.
• B) A stock with a negative beta must in theory have a negative required rate of return.
• C) If a stock's beta doubles, its required rate of return must also double.
• D) If a stock's returns are negatively correlated with returns on most other stocks, the stock's beta will be negative.

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Definitions:

Lateral Communications

the exchange of information or ideas between individuals or groups at the same level of an organizational hierarchy.

Richest Communication

implies the most effective and nuanced form of communication, often involving multiple channels that provide immediate feedback, such as face-to-face conversations.

Posted Notice

A public announcement or warning that is displayed physically or digitally in a conspicuous place.

Telecommuting

The practice of working from a remote location, outside of a traditional office environment, often facilitated by digital communication tools.