A stock that had a beta of 2 would have a required rate of return that was twice the market risk premium.

Question

Quizplus · Accepted Answer

The beta of a stock measures the stock's systematic risk in relation to the overall market. The required rate of return for a stock with a beta of 2 would be equal to the risk-free rate plus 2 times the market risk premium, not twice the market risk premium. Therefore, the statement is false.

A Stock That Had a Beta of 2 Would Have