A stock with a beta of 1.0 would on average earn the risk-free rate.

Name: A stock with a beta of 1.0 would on average earn the risk-free rate.
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Question

Quizplus · Accepted Answer

A stock with a beta of 1.0 is expected to move with the market, not necessarily earn the risk-free rate. The risk-free rate is typically earned by investments considered to have zero risk, such as government bonds, not by stocks which are subject to market risk.

A Stock with a Beta of 1