If the line measuring a stock's historic returns against the market's historic returns has a slope greater than 1.0, then the:
A)stock is currently underpriced.
B)market risk premium is increasing.
C)stock has a significant amount of unique risk.
D)stock has a Beta exceeding 1.0.

Question

Quizplus · Accepted Answer

If the line measuring a stock's historic returns against the market's historic returns has a slope greater than 1.0, it means that the stock's movements are more pronounced than the market's movements. This indicates that the stock has a Beta exceeding 1.0, meaning that it is more volatile than the market.

If the Line Measuring a Stock's Historic Returns Against the Market's