Stock a Has a Beta = 0

question 131

Multiple Choice

Stock A has a beta = 0.8, while Stock B has a beta = 1.6.Which of the following statements is CORRECT?

• A) If the marginal investor becomes more risk averse, the required return on Stock B will increase by more than the required return on Stock A.
• B) An equally weighted portfolio of Stocks A and B will have a beta lower than 1.2.
• C) If the marginal investor becomes more risk averse, the required return on Stock A will increase by more than the required return on Stock B.
• D) If the risk-free rate increases but the market risk premium remains constant, the required return on Stock A will increase by more than that on Stock B.
• E) Stock B's required return is double that of Stock A's.

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Revised Article 3

An updated version of Article 3 of the Uniform Commercial Code (UCC) that governs negotiable instruments, including checks and promissory notes.

UCC

Uniform Commercial Code, a set of laws that provide legal rules and regulations governing commercial or business dealings and transactions in the United States.

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