The stock of the Goldy Corporation has a beta of -0.25. If the expected return on the market decreases by 4%, then the expected return on Goldy should

Question

Quizplus · Accepted Answer

The expected return on Goldy should move in the opposite direction of the market, due to its negative beta. Thus, if the market decreases by 4%, the expected return on Goldy should increase by (-0.25) x 4% = 1%.

The Stock of the Goldy Corporation Has a Beta of -0.25