Any change in beta is likely to affect the required rate of return on a security, which implies that a change in beta will likely have an impact on the security's price.

Question

Quizplus · Accepted Answer

A change in beta affects the required rate of return on a security, which is a component in determining the security's price through the cost of capital or discount rate. Therefore, a change in beta is likely to have an impact on the security's price.

Any Change in Beta Is Likely to Affect the Required