Which of the Following Statements Is True About the Beta

question 34

Multiple Choice

Which of the following statements is true about the beta of a portfolio?

• A)If the beta of a portfolio doubles, its required return also doubles.
• B)If a stock included in the portfolio has a negative beta, the portfolio's required return is negative.
• C)Portfolios that contain higher beta stocks have more company-specific risk, but do not necessarily have more market risk.
• D)If a portfolio's beta increases from 1.2 to 1.5, its actual rate of return will decrease by 1.5 times the market risk premium.
• E)If the beta of a stock is three, the stock's relevant risk is three times as volatile as the market portfolio.

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Definitions:

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The use of famous individuals to promote products, brands, or political ideas, leveraging their public image and influence.

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