If Last Month a Stock with Beta of 1

question 75

Multiple Choice

If last month a stock with beta of 1.0 lost 2% while the S&P 500 had a 1% gain,then it appears that:

• A) beta has been calculated incorrectly.
• B) the S&P 500 cannot represent the market.
• C) the firm may have released negative information.
• D) the market index had a good month.

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