For a stock with beta equal to 1.5 signiﬁes that the stock has a 50% higher expected return than the
average stock.

Name: For a stock with beta equal to 1.5 signiﬁes that the stock has a 50% higher expected return than the average stock.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A stock with a beta of 1.5 indicates that it is 50% more volatile than the market, not that it has a 50% higher expected return. Beta measures risk, not return.

For a Stock with Beta Equal to 1