A Stock with a Beta of 1.0 Will

question 158

Multiple Choice

A stock with a beta of 1.0 will:

• A)always generate a return equal to the market average.
• B)always generate a return that is close to the market average.
• C)always generate a return that is at least as large as the market average..
• D)All of the above are correct.
• E)None of the above is correct.

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Definitions:

Stockbrokers

Licensed professionals who buy and sell securities on behalf of clients, typically charging commissions for their services.

Direct Transfers

The process of moving assets or capital directly between parties without the use of an intermediary.

Maturities

The dates on which the principal or face value of a debt instrument becomes due and is to be paid to investors.

Capital Market Securities

Financial instruments such as stocks and bonds that are traded in capital markets and represent long-term funding sources for corporations and governments.