Stock a Has a Beta of 0

question 31

Multiple Choice

Stock A has a beta of 0.7,whereas Stock B has a beta of 1.3.Portfolio P has 50% invested in both A and B.Which of the following would occur if the market risk premium increased by 1%? (Assume that the risk-free rate remains constant.)

• A)The required return on Portfolio P would increase by 1%.
• B)The required return on both stocks would increase by 1%.
• C)The required return on Portfolio P would remain unchanged.
• D)The required return on Stock A would increase by more than 1%, while the return on Stock B would increase by less than 1%.

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Definitions:

Violence Continuum

The violence continuum describes the range or spectrum of behaviors that constitute violence, from verbal abuse to physical assault, indicating the progression of aggressive actions.

Rage

Intense, uncontrolled anger that can manifest in violent behavior or emotional outbursts.

Lack of Sensitivity

The inability or unwillingness to perceive and respond to the needs or feelings of others.

Becoming Reclusive

Refers to the process where an individual gradually withdraws from social interactions and activities, preferring solitude.