Stock A's Beta Is 1

question 57

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 about these securities? (Assume market equilibrium.)

• A) Strike price.
• B) Variability of the stock price.
• C) Option's time to maturity.
• D) All of the above.

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Definitions:

Rutabagas

A root vegetable with a taste that is a mixture of cabbage and turnip, commonly used in cooking.

Broccoli

A green vegetable with a large flowering head, stalk, and small associated leaves, often eaten for its nutritional qualities.

Marginal Utility per Dollar

The additional satisfaction or utility gained from consuming one more unit of a good or service, divided by its cost.

Potatoes

Tubers of the plant Solanum tuberosum, widely used as a staple food item, grown in various parts of the world.