All Else the Same, an Increase in the Riskiness of a Stock

question 28

Multiple Choice

All else the same, an increase in the riskiness of a stock as measured by its beta will result in a ____ stock price

• A) higher
• B) lower
• C) no change
• D) The effect will vary depending on the model used.
• E) Insufficient information.

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Definitions:

Damages

Compensation claimed by a person for loss or injury as a result of a breach of contract or tort.

Compensation

Payment or reward given to someone as a recompense for loss, injury, or suffering.

Legal Systems

The frameworks and institutions through which laws are developed, interpreted, and enforced to govern social behavior and resolve disputes.

Affirmed

In a legal context, when a higher court upholds the decision of a lower court, confirming the original decision was correct.