A stock with which one of the following betas has an expected return that most resembles the overall market expected rate of return?
A) 0.33
B) 0.74
C) 0.99
D) 1.06
E) 1.22

Question

Quizplus · Accepted Answer

A beta of 1 indicates that the stock has the same level of risk as the overall market. A beta of less than 1 indicates lower risk than the market, and a beta of greater than 1 indicates higher risk than the market. Therefore, a stock with a beta of 0.99 would have an expected return that most closely resembles the overall market expected rate of return.

A Stock with Which One of the Following Betas Has