An Increase in the Beta of a Corporation, All Else

Multiple Choice

An increase in the beta of a corporation, all else being the same, indicates ________.

A) a decrease in risk, a higher required rate of return, and hence a lower share price
B) an increase 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