If a stock beta is 1.8 during a period when the market portfolio was down by 5%, then, a priori, we could expect this individual stock to;

Gain more than 10%

lose, but less that 5%

gain, but less than 10%

less more than 5%

2. Which of these determines the minimum acceptable rate of return on capital investment?

The rate of return that is justified by the project beta

The profit margin of the existing firm

The rate of return on the firm's outstanding shares

The rate of return on risk-free debt securities

3. If the slope of the line measuring a stocks returns aginst the markets return is for stock A is higher than its for stock B, the Stock A has.............than B

Higher market risk premium

higher beta

lower market risk premium

lower beta