Which of the Following Statements Is CORRECT

question 93

Multiple Choice

Which of the following statements is CORRECT?

• A) Other things held constant, if investors suddenly become convinced that there will be deflation in the economy, then the required returns on all stocks should increase.
• B) If a company's beta were cut in half, then its required rate of return would also be halved.
• C) If the risk-free rate rises by 0.5% but the market risk premium declines by that same amount, then the required rates of return on stocks with betas less than 1.0 will decline while returns on stocks with betas above 1.0 will increase.
• D) If the risk-free rate rises by 0.5% but the market risk premium declines by that same amount, then the required rate of return on an average stock will remain unchanged, but required returns on stocks with betas less than 1.0 will rise.
• E) If a company's beta doubles, then its required rate of return will also double.

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Definitions:

Employee Value Proposition

A unique set of benefits and rewards offered by an employer to attract, retain, and engage employees.

Brand Positioning

The strategy of creating a unique impression in the customer's mind so that they perceive your brand distinctively in comparison to competitors.

Succession Planning

A strategy for identifying and developing new leaders who can replace old leaders when they leave, retire or pass away.

Succession Management

The process of identifying and developing potential future leaders or senior managers, as well as individuals to fill other business-critical positions, either in the short or the long term.