An Increase in Nondiversifiable Risk Would ________

Multiple Choice

An increase in nondiversifiable risk would ________.

A) cause an increase in the beta and would lower the required return
B) have no effect on the beta and would, therefore, cause no change in the required return
C) cause an increase in the beta and would increase the required return
D) cause a decrease in the beta and would, therefore, lower the required rate of return