One Asset Has a Beta of 1

question 62

Multiple Choice

One asset has a beta of 1.5 and another asset has a beta of 0.75. The difference in beta means that the asset with a beta of 0.75 has

• A) 75 percent less nondiversifiable risk than the asset with a beta of 1.5.
• B) 75 percent more nondiversifiable risk than the asset with a beta of 1.5.
• C) twice as much nondiversifiable risk as the asset with a beta of 1.5.
• D) one-half as much nondiversifiable risk as the asset with a beta of 1.5.

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Definitions:

Clinical Psychologist

A professional specializing in diagnosing and treating mental health disorders, emotional disturbances, and dysfunctional behavior through psychological methods.

Evolutionary Psychologist

A professional in a branch of psychology that studies how evolutionary theory applies to human behavior and mental processes.

Economic Resources

Assets, capital, and materials available to individuals, businesses, or countries for producing goods and services to meet their needs and wants.

Evolutionary Psychologist

A professional who studies how evolutionary principles help explain the structure and function of the human mind.