Which Statement About a Stock's Beta Is Correct

question 142

Multiple Choice

Which statement about a stock's beta is correct?

• A)If a stock has a beta equal to 1.0, its required rate of return will be unaffected by changes in the market risk premium.
• B)A stock with a negative beta must in theory have a negative required rate of return.
• 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.

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Definitions:

Full Term

In obstetrics, a pregnancy period considered complete and normal, typically ranging from 37 to 41 weeks.

Miscarriage

A spontaneous loss of a pregnancy before the 20th week.

Pregnancy Loss

The loss of a pregnancy before the baby is born, which can include miscarriage or stillbirth, often leading to emotional and psychological distress.

Annually

Referring to something that occurs once every year.