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

Question

Quizplus · Accepted Answer

This is because the required rate of return on a stock is determined by the risk-free rate, the market risk premium, and the stock's beta. If the beta changes, the required rate of return will change, and this will affect the stock's price.

Any Change in Beta Is Likely to Affect the Required