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(Interpreting Beta) A company wishes to assess the impact of changes in the market return on an asset that has a beta of 1.50. (a).
(Interpreting Beta) A company wishes to assess the impact of changes in the market return on an asset that has a beta of 1.50. (a). If the market return increased by 15%, what impact would this change have on the assets return? (b). If the market decreased by 10%, what impact would this change have on the assets return? (c). Would this asset be considered more or less risky that the market? (d). If the market increased by 12% and the return increased by exactly the same amount, what would the new beta for this asset be?
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