One Asset Has a Beta of 1

question 21

Multiple Choice

One asset has a beta of 1.5 and another asset has a beta of 0.75. The difference in beta mean that the asset with a beta of 0.75 has:

• A) 75 percent less nondiversifiable risk than the asset with a beta of 1.5
• B) 75 percent more nondiversifiable risk than the asset with a beta of 1.5
• C) Twice as much nondiversifiable risk as the asset with a beta of 1.5
• D) One-half of the nondiversifiable risk of the asset with a beta of 1.5

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Definitions:

William Jennings Bryan

William Jennings Bryan was a leading American politician and orator of the late 19th and early 20th centuries, known for his advocacy for populism, prohibition, and his three unsuccessful presidential campaigns.

Forward-Thinking

Characterized by the ability to anticipate and plan for future needs, trends, or problems.

Telegraph

An early method of long-distance communication that transmitted electric signals over wires to convey messages across distances instantly.