Suppose Stock X Has a Beta of 2

question 197

Multiple Choice

Suppose stock X has a beta of 2.5 and stock Y has a beta of 0.5.From this we can conclude that X has

• A)5 times the nondiversifiable risk of the market portfolio.
• B)5 times the nondiversifiable risk of Y.
• C)2.5 times the nondiversifiable risk of Y.
• D)2.5 times the diversifiable risk of the market portfolio.

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Tropical Island

A landmass located in the tropics, characterized by warm climates, and surrounded by the sea, often considered paradisiacal.

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Sidewalk

A paved path for pedestrians at the side of a road.

Schema

Cognitive structures that help individuals organize and interpret information, based on their accumulated knowledge and experiences.