Stock A's Beta Is 1

question 80

Multiple Choice

Stock A's beta is 1.5 and Stock B's beta is 0.5.Which of the following statements must be true,assuming the CAPM is correct.

• A) Stock A would be a more desirable addition to a portfolio then Stock B.
• B) In equilibrium,the expected return on Stock B will be greater than that on Stock A.
• C) When held in isolation,Stock A has more risk than Stock B.
• D) Stock B would be a more desirable addition to a portfolio than A.
• E) In equilibrium,the expected return on Stock A will be greater than that on B.

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Definitions:

Population Trends

Patterns or movements in population growth, decline, or composition over time, which can impact various sectors including planning, policy, and resource allocation.

Continuous Metric

A measurement scale that allows for an infinite number of values within a given range, indicating continuous variation.

Time

The indefinite continued progress of existence and events in the past, present, and future regarded as a whole.

Volume

The quantity of three-dimensional space enclosed by a closed surface or the amount of space that a substance or object occupies.