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What is the meaning of a negative beta for a stock? The stock’s returns are moving...

What is the meaning of a negative beta for a stock?

The stock’s returns are moving in the opposite of the market’s returns

The stock is highly risky (riskier than average)

The stock has a negative average return

Negative beta is meaningless in the context of investment theory

The duration of a 30-year zero-coupon bond is higher when the discount rate is

higher.

lower.

equal to the risk free rate.

None of these is correct.

The bond's duration is independent of the discount rate.


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Answer #1

a). Negative betas are possible for investments that tend to go down when the market goes up and vice versa. Thus the answer is-

  • The stock’s returns are moving in the opposite of the market’s returns

b)

The duration of a 30-year zero-coupon bond is higher when the discount rate is higher

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