Question
An asset has a good beta of 1.5 and a bad beta of 1.4, it implies that (pick the one that is perfectly correct; do
An asset has a good beta of 1.5 and a bad beta of 1.4, it implies that (pick the one that is perfectly correct; do not pick the one that is only partially reasonable)
A. The analyst did the calculation incorrectly, as bad beta should be negative.
B. The asset is an ideal investment candidate, as its good beta is greater than the bad beta.
C. When the market is up by 2%, the asset will on average go up by 3%; when the market is down by 2%, the asset will on average go down by 2.8%.
D. The asset is not an ideal investment candidate, as its good beta is not high enough but the bad beta is too high
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