Question: Fill in the blanks. 1. Risk reduction occurs when two stocks are ______ correlated. 2. To determine the beta of a stock, we compare the

Fill in the blanks.

1. Risk reduction occurs when two stocks are ______ correlated.

2. To determine the beta of a stock, we compare the returns on the stock against the returns on the ____, generally over a period of several years.

3. Using the dividend growth model, if the value of a stock is the next dividend divided by the required return minus the growth rate, then the required return on equity is the dividend yield plus the ___.

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