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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Definitions:

Benefits Sought

The specific advantages or positive outcomes that consumers desire when choosing among products or services.

Behavioral Segmentation

The process of dividing a market into groups based on consumer behaviors, such as purchase history, product usage, or decision-making patterns.

Product Features

Specific characteristics or attributes of a product that are intended to enhance its appeal to potential buyers.

Different Customers

Different customers refer to the varying groups of consumers, each with unique needs, preferences, and purchasing behaviors.