Question: tock A s beta is 1 . 0 ; this means that the stock moves in the same direction and magnitude as the market.A stock

tock A

s beta is

1.0

; this means that the stock moves in the same direction and magnitude as the market.A stock that is more volatile than the market will have a beta of more than

1.0 .

Higher

-

beta stocks are expected to have lower required returns.

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