Which Statement About a Stock's Beta Is Correct

question 142

Multiple Choice

Which statement about a stock's beta is correct?

• A)If a stock has a beta equal to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
• B)A stock with a negative beta must in theory have a negative required rate of return.
• C)If a stock's beta doubles, its required rate of return must also double.
• D)If a stock's returns are negatively correlated with returns on most other stocks, the stock's beta will be negative.

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