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Stock A's beta is 1.5, Stock B's beta is 0.9, and Stock C's beta is -1.1. Use the information to answer the following questions: (1)
Stock A's beta is 1.5, Stock B's beta is 0.9, and Stock C's beta is -1.1. Use the information to answer the following questions: (1) Which stock is most risky according to their beta risk? (2) If the stock market return is expected to increase by 5%, use beta to predict the percentage change in each stock's return. (3) If the stock market is expected to decline (i.e. be bearish) in next month, which stock should investors buy?
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