If a certain stock has a beta greater than 1.0,it means:
A)the stock's return has greater than average sensitivity to the market return.
B)the stock would be an attractive holding during a bear market.
C)an investor will earn a higher return on the stock than the market returns.
D)the stock is less risky than the market portfolio.

Question

Quizplus · Accepted Answer

A beta greater than 1.0 indicates that the stock's return has greater than average sensitivity to the market return. This means that if the market goes up or down, the stock's return will also go up or down more than the average stock. This implies higher risk, but also the potential for higher returns.

If a Certain Stock Has a Beta Greater Than 1