The following are beta's for a Microsoft during four time periods. Compare the four estimated betas. What do you conclude about how Microsoft's exposure to systematic risk has changed over that 20-year period? What do you think explains the change?

1987 1991: 1.5296

19921996: 0.8175

1997 2001: 1.8946

2002 2006 1.0435

Which of the following statements is true? (Select the best choice below.)

A. Microsoft's systematic risk increased in the early 1990s as Microsoft established itself as the dominant operating system company, but increased during the internet bubble in the late 1990s (when tech stocks were soaring). It has since decreased.

B. Microsoft's systematic risk decreased in the early 1990s as Microsoft established itself as the dominant operating system company, but increased during the internet bubble in the late 1990s (when tech stocks were soaring). It has since increased.

C. Microsoft's systematic risk decreased in the early 1990s as Microsoft established itself as the dominant operating system company, but increased during the internet bubble in the late 1990s (when tech stocks were soaring). It has since decreased.

D. Microsoft's systematic risk decreased in the early 1990s as Microsoft established itself as the dominant operating system company, and decreased during the internet bubble in the late 1990s (when tech stocks were soaring). It has since increased.