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Suppose you plot the historical returns of a stock versus the returns of the overall market. If points are considerably scattered throughout the plot, rather
Suppose you plot the historical returns of a stock versus the returns of the overall market. If points are considerably scattered throughout the plot, rather than staying tight to the line of best fit, this reflects the:
changes in the market risk premium over time.
current underpricing of the stock.
high beta of the stock.
low beta of the stock.
asset-specific risk of the stock.
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