Section A (1 Mark)If a certain stock has a beta greater than 1.

AAFM CWM_LEVEL_2 Question Answer

Section A (1 Mark)

If a certain stock has a beta greater than 1.0, it means that

The stock's return is more volatile than that of the market portfolio.

An investor can eliminate the risk by combining it with another stock that has a negative beta.

An investor will earn a higher return on his stock than that on the market portfolio.

The stock is less risky than the market portfolio.

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