If an investor has a $50,000 investment in a stock and has used beta to measure the maximum daily percentage loss as −5 percent, the maximum daily loss in dollars would be $10,000.

Name: If an investor has a $50,000 investment in a stock and has used beta to measure the maximum daily percentage loss as −5 percent, the maximum daily loss in dollars would be $10,000.
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Quizplus · Accepted Answer

A −5 percent loss on a $50,000 investment would result in a maximum daily loss of $2,500, not $10,000.

If an Investor Has a $50,000 Investment in a Stock