If the slope of the line measuring a stock's historic returns against the market's historic returns is positive, then the stock:
A)has a Beta greater than 1.0.
B)has no unique risk.
C)has a positive Beta.
D)plots above the security market line.

Question

Quizplus · Accepted Answer

A positive slope means that the stock moves in the same direction as the market and has a positive relationship with the market. Beta is a measure of a stock's volatility in relation to the market, with a positive beta meaning that the stock tends to be more volatile than the market. Therefore, if the line measuring the stock's historic returns against the market's historic returns has a positive slope, the stock has a positive beta.

If the Slope of the Line Measuring a Stock's Historic