Texas Computers (TC) Stock Has a Beta of 1

question 62

Multiple Choice

Texas Computers (TC) stock has a beta of 1.5, and American Water (AW) stock has a beta of 0.5. Which of the following statements will be true about these securities?

• A) The addition of TC would reduce portfolio risk more than the addition of AW.
• B) The addition of AW would reduce total portfolio risk more than the addition of TC.
• C) The required return for TC is greater than the required return for AW.
• D) The required return for AW is greater than the required return of TC.

---

Definitions:

Age Difference

The gap or difference in years between the ages of two or more individuals.

Gay and Lesbian Households

Family units comprised of individuals of the same gender in a romantic relationship, often with children.

Psychological Well-being

Psychological well-being refers to the state of an individual's mental health, encompassing emotional, cognitive, and social aspects of happiness and contentment.

Peer Relationships

The interactions and bonds formed between individuals of similar age groups, which play a significant role in social and emotional development.