Nickhp44
May 13, 2012, 07:37 PM
These two questions I am almost positive my answer is correct, but it can't hurt to make sure :)
(1)
A beta coefficient for a risky stock is (ANSWER: C)
A. Less than 1.0
B. Equal to 1.0
C. Greater than 1.0
D. Negative
It's got to be C because the more volatile the stock (>1), the more risky, correct?
&
(2)
A beta coefficient of 1.2 implies (ANSWER A)
1. The stock is more risky than the market
2. The stock's return is 1.2 times the return on the market
3. The stock is less risky than the market
4. The market's return is 1.2 times the return on the stock
A. 1 and 2
B. 1 and 4
C. 2 and 3
D. 3 and 4
Thanks for your help!
(1)
A beta coefficient for a risky stock is (ANSWER: C)
A. Less than 1.0
B. Equal to 1.0
C. Greater than 1.0
D. Negative
It's got to be C because the more volatile the stock (>1), the more risky, correct?
&
(2)
A beta coefficient of 1.2 implies (ANSWER A)
1. The stock is more risky than the market
2. The stock's return is 1.2 times the return on the market
3. The stock is less risky than the market
4. The market's return is 1.2 times the return on the stock
A. 1 and 2
B. 1 and 4
C. 2 and 3
D. 3 and 4
Thanks for your help!