A(n) ________ in the Beta Coefficient Normally Causes ________ in the Required

question 106

Multiple Choice

A(n) ________ in the beta coefficient normally causes ________ in the required return and therefore ________ in the price of the stock, everything else remaining the same.

• A) increase; an increase; an increase
• B) increase; a decrease; an increase
• C) increase; an increase; a decrease
• D) decrease; a decrease; a decrease

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Definitions:

Principal

The original sum of money borrowed in a loan or the initial amount of money invested, excluding any interest or gains.

Simple Interest

A method of calculating interest whereby it is applied only to the principal amount, not including any previously earned interest.

Deposit Maturity

The end of a deposit term at which point the deposited funds plus any accrued interest are available to the account holder.

Deposit Date

The specific day on which funds are placed into an account.