IBM Has a Beta of 1

question 106

Multiple Choice

IBM has a beta of 1.0 and Apple Computer has a beta of 3.0.Which of the following statements must be correct?

• A)The market risk premium for Apple must be larger than the market risk premium of IBM.
• B)If investors become more risk averse, the expected return of Apple will increase more than the expected return on IBM.
• C)Apple's expected rate of return must be three times as large as IBM's.
• D)None of these statements is correct.

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Definitions:

Attitudes

A fixed perspective or sentiment about an individual or thing, often shown through one's actions.

Change Agents

Individuals or entities that act as catalysts for change within an organization, promoting and facilitating innovation and improvement.

Transformational Change

A fundamental, radical reorganization and rethinking of business operations to achieve significant improvements in performance.

Organizational Change

The process through which a company or institution changes its structure, strategies, operational methods, or culture to effect change within the organization and respond to internal and external pressures.