Which of the following statements concerning beta are correct?
I.Stock with high standard deviations of returns will always high betas.
II.The higher the beta, the higher the expected return.
III.A beta can be positive, negative, or equal to zero.
IV.A beta of .35 indicates a lower rate of risk than a beta of -0.50.
A)II and III only
B)I and IV only
C)II, III and IV only
D)I, II, III and IV

Question

Quizplus · Accepted Answer

II, III, and IV are correct. A beta of .35 indicates a lower rate of risk than a beta of -0.50 because a positive beta indicates that the stock moves in the same direction as the market, while a negative beta indicates that the stock moves in the opposite direction of the market.

Which of the Following Statements Concerning Beta Are Correct