ZuoTi.Pro
Question

A stock has a market-beta of 1.23. This means that The stock is a less risky...

A stock has a market-beta of 1.23. This means that

The stock is a less risky investment than an investment in the overall stock market

If the general stock market is up 1.23%, this stock will be down 1.23%.

The stockʹs returns will vary much more than the returns of the overall stock market

None of the choices

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Stock market beta is generally considered to be 1, if any stock beta is lower than 1 than stock vary less than the market, if stock beta is greater than 1 then it will vary more than market,

the correct choice is

The stockʹs returns will vary much more than the returns of the overall stock market

0 0
Add a comment
Know the answer?
Add Answer to:
A stock has a market-beta of 1.23. This means that The stock is a less risky...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock...

    Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = CVy = Which stock is riskier for a diversified investor? For...

  • EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8,...

    EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 35% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = CVy = Which stock is riskier for...

  • EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8,...

    EVALUATING RISK AND RETURN Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 40% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 20.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVx = ________ CVy = ________ b. Which...

  • EVALUATING RISK AND RETURN Stock X has a 10.0% expected return, a beta coefficient of 0.9,...

    EVALUATING RISK AND RETURN Stock X has a 10.0% expected return, a beta coefficient of 0.9, and a 35% standard deviation of expected returns. Stock Y has a 12.0% expected return, a beta coefficient of 1.1, and a 25.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. a. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CV, - CV- b. Which stock is riskler...

  • Stock X has a 9.5% expected return, - beta coefficient of 0.B, and a 40% standard...

    Stock X has a 9.5% expected return, - beta coefficient of 0.B, and a 40% standard deviation of expected returns. Stock Y has a 13.0% expected return, a beta coefficient of 1.3, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. 2. Calculate each stock's coefficient of variation. Round your answers to two decimal places. Do not round intermediate calculations. CVX = X CV = 2.4 D. Which stock is riskier for...

  • An investment portfolio with a beta of 2.0 is less than twice as risky as the...

    An investment portfolio with a beta of 2.0 is less than twice as risky as the market portfolio. Is this statement true or false and explain your response why.

  • If the beta for Stock j is 0.8, it means that the change in the price...

    If the beta for Stock j is 0.8, it means that the change in the price of Stock j fluctuates _______ the stock market index. a) less than b) the same as c) more than

  • Microsoft Stock has a beta of 1.20. (1) If the market return increased by 15%, what...

    Microsoft Stock has a beta of 1.20. (1) If the market return increased by 15%, what impact would this change be expected to have on Microsoft stock’s return? (2) If the market return decreased by 8%, what impact would this change be expected to have on Microsoft stock’s return? (3) Would Microsoft stock be considered more or less risky than the market? Explain

  • Hi there! I need help with A, C, and E, please. Thanks :) Stock X has...

    Hi there! I need help with A, C, and E, please. Thanks :) Stock X has a 9.5% expected return, a beta coefficient of 0.8, and a 30% standard deviation of expected returns. Stock Y has a 12.5% expected return, a beta coefficient of 1.2, and a 30.0% standard deviation. The risk-free rate is 6%, and the market risk premium is 5%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the...

  • 1. If a stock has a market beta less than 1, the expected return will be...

    1. If a stock has a market beta less than 1, the expected return will be less than expected return of market portfolio. True or False? 2. ABC, Inc., has a beta of 1.99. The risk-free rate is 3.45% and the market risk premium is 5.74%. What is the required rate of return on ABC's stock? Note: Convert your answer to percentage and round off to two decimal points. 3. Semi-strong-form efficient markets are not weak-form efficient. True or False?

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT