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Market Risk Refers to the Tendency of a Stock to Move

Question 121

Multiple Choice

Market risk refers to the tendency of a stock to move with the general stock market.Which best describes a stock with an above-average market risk?


A) A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be greater than 1.0.
B) A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be less than 1.0.
C) A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be equal to 1.0.
D) A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be greater than .50 and less than 1.0.

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