Stock A's Beta Is 1

question 53

Multiple Choice

Stock A's beta is 1.7 and Stock B's beta is 0.7.Which of the following statements must be true, assuming the CAPM is correct.

• A) In equilibrium, the expected return on Stock B will be greater than that on Stock A.
• B) When held in isolation, Stock A has more risk than Stock B.
• C) Stock B would be a more desirable addition to a portfolio than A.
• D) In equilibrium, the expected return on Stock A will be greater than that on B.
• E) Stock A would be a more desirable addition to a portfolio then Stock B.

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Definitions:

Observable Culture

Aspects of an organization's culture that can be seen and experienced directly, such as rituals, dress codes, and office layout.

Rites And Rituals

Established ceremonies or actions performed in a prescribed sequence, often significant in cultural or organizational contexts.

Norms

Shared guidelines or expectations within a group or society about how members should act in certain situations.

Observable Culture

The visible and tangible elements of a corporate culture, such as rituals, symbols, behaviors, and physical settings that can be seen and experienced by members.