Security Beta A 1.61 B 0.61 C -0.19

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a. Calculate the change in return for each security if the market experiences an increase in its rate of return of 12.3% over the next period.

b. Calculate the change in return for each security if the market experiences a decrease in its rate of return of 9.7% over the next period.

c. Rank and discuss the relative risk of each security on the basis of your findings. Which security might perform best during an economic downturn? Explain.