Consider the CAPM. The risk-free rate is 6% and the expected return on the market is 18%. What is the expected return on a stock with a beta of 13 6% 15.6% 18% 21.6% A security's beta coefficient will be negative if _____________ its stock price has historically been very stable market demand for the firm's shares is very low its returns are negatively correlated with market index returns its returns are positively correlated with market index returns. The risk that can be reduced through diversification is __________. beta firm specific risk market risk systematic risk A stock has a covariance with the market of 0.00985. The standard deviation of the market is 15% and the standard deviation of the stock is 21%. What is the stock's beta? 1.000 0.438 0.313 0.066