Multiple Choice
Which one of the following statements is correct?
A) A beta of 1.2 indicates that a security has less risk than the overall market.
B) Treasury bills have a beta of zero.
C) A stock with a beta of 1.4 has less systematic risk than a stock with a beta of .9.
D) The risk premium associated with a stock will decrease as the beta of the stock increases.
E) The beta of a diversified portfolio will approach zero as the number of stocks in the portfolio is increased.
Correct Answer:
Verified
Correct Answer:
Verified
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