A stocks contribution to the market risk of a well-diversified portfolio is called ____________ risk. It can
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Question:
A stock’s contribution to the market risk of a well-diversified portfolio is called ____________ risk. It can be measured by a metric called the beta coefficient, which calculates the degree to which a stock moves with the movements in the market.
a) relevant
b) unsystematic
TRUE OR FALSE
a) A stock that is more volatile than the market will have a beta of less than 1.0.
b) Beta measures the volatility in stock movements relative to the market.
c) Over time, a stock with a beta of 1.0 produces a return that goes up and down with a 1:1 relationship with the return on the market.
Related Book For
Fundamentals of Financial Management
ISBN: 978-0324664553
Concise 6th Edition
Authors: Eugene F. Brigham, Joel F. Houston
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