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Author Question: Stock A has a beta = 0.5, while Stock B has a beta = 1.5. Which of the following statements is correct? (Read 55 times)

llesku

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Question 1

Standard deviation is a measure of which of the following types of risk?

nondiversifiable risk


market risk


combination risk 


stand-alone risk



Question 2

Stock A has a beta = 0.5, while Stock B has a beta = 1.5. Which of the following statements is correct?

Stock B’s required return is three times that of Stock A’s.


If the marginal investor becomes more risk averse, the required return on Stock B will increase by less than the required return on Stock A.


An equally weighted portfolio of Stocks A and B will have a beta higher than 1.


If the risk-free rate increases but the market risk premium remains constant, the required return on Stock A will increase byas much asthat on Stock B.



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Marked as best answer by llesku on Aug 7, 2023

Tussalpain

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llesku

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Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it


olderstudent

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Reply 3 on: Yesterday
Excellent

 

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