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Which of the following statements concerning beta is (are) correct? I. The betas of most stocks are constant over time. II. Beta measures diversifiable risk
Which of the following statements concerning beta is (are) correct? I. The betas of most stocks are constant over time. II. Beta measures diversifiable risk while standard deviation measures systematic risk. III. A stock with a beta of 1.3 is less risky than a stock with a beta of 0.42. IV. The stock of ABC Inc. has a beta of 0.80. The market rate of return is expected to increase by 5%. Beta predicts that the rate of return on ABC stock should increase by 4%. A. I, II and IV only B. IV only C. I and IV only D. II and III only
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