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Suppose a stocks beta increased to 1.5 from 1.0. Holding everything else constant, which of the followings is most correct? The stock became riskier and
Suppose a stocks beta increased to 1.5 from 1.0. Holding everything else constant, which of the followings is most correct?
The stock became riskier and thus the stock price should decrease. |
The company-specific risk of the stock has increased. |
The required rate of return on the stock would decrease. |
The stock became safer and thus the stock price should increase. |
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