Asset 1 Has a Beta of 1

question 45

Multiple Choice

Asset 1 has a beta of 1.2 and Asset 2 has a beta of 0.6.Which of the following statements is correct?

• A) Asset 1 is more volatile than Asset 2.
• B) Asset 1 has a higher expected return than Asset 2.
• C) In a regression with individual asset's return as the dependent variable and the market's return as the independent variable,the R-squared value is higher for Asset 1 than it is for Asset 2.
• D) All of the above statements are correct.

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Definitions:

Structural Material

Materials used in the construction of buildings, bridges, or other structures, providing support and stability.

Fungi

A kingdom of spore-producing organisms feeding on organic matter, including molds, yeast, mushrooms, and toadstools, distinct from plants and animals.

Enzymes

Proteins that act as biological catalysts, speeding up reactions in cells without being consumed in the process.

Proteins

Large, complex molecules made up of amino acids that perform a vast array of functions, including catalyzing metabolic reactions, DNA replication, and transporting molecules.