Which of the Following Statements Is Most Correct About a Stock

Multiple Choice

Which of the following statements is most correct about a stock which has a beta = 1.2?

A) If the stock's beta doubles its expected return will double.
B) If expected inflation increases 3 percent, the stock's expected return will increase by 3 percent.
C) If the market risk premium increases by 3 percent the stock's expected return will increase by less than 3 percent.
D) Answers a, b, and c are correct.
E) Answers b and c are correct.