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:

Traffic Accidents

Traffic accidents are unexpected events involving vehicles on the road, leading to damage, injuries, or fatalities, often caused by risky driving behaviors, environmental conditions, or mechanical failures.

Independent

A variable or condition that is manipulated or classified in an experiment to investigate its effect on the dependent variable without being influenced by other variables.

Deviations

Differences between individual observations and a central point, often the mean, in a data set.

ANOVA F Test

A statistical test used in analysis of variance (ANOVA) to determine the equality of means among three or more groups.