The Average of the Betas for All Stocks Is

question 82

Multiple Choice

The average of the betas for all stocks is:

• A) greater than 1.0; most stocks are aggressive.
• B) less than 1.0; most stocks are defensive.
• C) unknown; betas are continually changing.
• D) exactly 1.0; these stocks represent the market.

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Definitions:

Devise

To plan or invent a complex process, system, or mechanism through careful thought.