Which of the Following Statements Is CORRECT

question 84

Multiple Choice

Which of the following statements is CORRECT?

• A)If a stock has a beta of to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
• B)The slope of the Security Market Line is beta.
• C)Any stock with a negative beta must in theory have a negative required rate of return, provided r_RF is positive.
• D)If a stock's beta doubles, its required rate of return must also double.
• E)If a stock's returns are negatively correlated with returns on most other stocks, the stock's beta will be negative.

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Definitions:

Unconditional Positive Regard

A term in psychology that refers to offering acceptance and support to someone without imposing conditions or judgment.

Rapport

A positive relationship marked by mutual understanding and emotional affinity between individuals.

Genuineness

The quality of being authentic, sincere, and honest in one's interactions and behavior.

Intellectualize

To intellectualize is to approach or analyze a situation or emotion in an overly rational manner, often as a defense mechanism to avoid confronting the underlying emotional aspects.