If a Certain Stock Has a Beta Greater Than 1

question 54

Multiple Choice

If a certain stock has a beta greater than 1.0,it means that

• A)the stock's return is more volatile than that of the market portfolio.
• B)an investor can eliminate the risk by combining it with another stock that has a negative beta.
• C)an investor will earn a higher return on his stock than that on the market portfolio.
• D)the stock is less risky than the market portfolio.

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Definitions:

Great Awakening

A series of religious revivals in the American colonies during the 18th century, emphasizing emotional involvement in religious matters.

James Oglethorpe

A British general, member of parliament, philanthropist, and founder of the colony of Georgia in the 18th century, known for his progressive views on prison reform and establishment of a free colony.

Enlightenment Ideals

A set of 18th-century philosophical principles emphasizing reason, individualism, and skepticism towards traditional societal structures.

Benjamin Franklin

One of the Founding Fathers of the United States, known for his contributions as an inventor, writer, statesman, and diplomat.