An Increase in the Beta of a Firm Indicates

Multiple Choice

An increase in the beta of a firm indicates , and, all else being the same, results in .

A) an increase in risk; a higher required rate of return and hence a lower share price.
B) a decrease in risk; a higher required rate of return and hence a lower share price.
C) a decrease in risk; a lower required rate of return and hence a higher share price.
D) an increase in risk; a lower required rate of return and hence a higher share price.