Which of the Following Statements Is CORRECT

question 87

Multiple Choice

Which of the following statements is CORRECT?

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