Which of the Following Is True Regarding the Beta Coefficient

question 386

Multiple Choice

Which of the following is true regarding the beta coefficient?

• A) It is a measure of unsystematic risk.
• B) A beta greater than one represents lower systematic risk than the market.
• C) Generally speaking, the higher the beta the higher the expected return.
• D) A beta of one indicates an asset is totally risk-free.
• E) The risk premium of an asset will increase if the beta of that asset decreases.

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