Stock a Has a Beta = 0

question 128

Multiple Choice

Stock A has a beta = 0.8, while Stock B has a beta = 1.6. Which of the following statements is CORRECT?

• A) Stock B's required return is double that of Stock A's.
• B) If the marginal investor becomes more risk averse, the required return on Stock B will increase by more than the required return on Stock A.
• C) An equally weighted portfolio of Stocks A and B will have a beta lower than 1.2.
• D) If the marginal investor becomes more risk averse, the required return on Stock A will increase by more than the required return on Stock B.

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Definitions:

BC Prints

This term does not have a widely accepted financial definition. It might be specific to a context or an organization. NO.

DSO

Stands for Days Sales Outstanding, a measure used to calculate the average number of days it takes a company to collect payment after a sale has been made.

Disbursement Float

Disbursement float refers to the time delay between writing a check and the time the funds are actually withdrawn from the payer's account.

Chequing Account

A type of bank account that offers easy access to funds for daily transactions, allowing for deposits, withdrawals, and cheque payments.