Identify the true statements about a beta coefficient. More than one answer may be correct. Multiple select question. A beta coefficient tells us how much systematic risk a particular asset has relative to an average asset representing the market portfolio. A beta coefficient tells us how much unsystematic risk a particular asset has relative to an average asset representing the market portfolio. By definition, an average asset has a beta of 1.0 relative to itself. A beta coefficient tells us how much total risk a particular asset has relative to an average asset representing the market portfolio.

Identify the true statements about a beta coefficient. More than one answer may be correct. Multiple select question. A beta coefficient tells us how much systematic risk a particular asset has relative to an average asset representing the market portfolio. A beta coefficient tells us how much unsystematic risk a particular asset has relative to an average asset representing the market portfolio. By definition, an average asset has a beta of 1.0 relative to itself. A beta coefficient tells us how much total risk a particular asset has relative to an average asset representing the market portfolio.

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter6: Risk And Return

Section: Chapter Questions

Problem 1Q

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In an efficient market when asset expected returns are plotted against asset betas, then all assets would be on the security market line A. Because all assets have the same beta B. Because no assets have the same risk premium C. Because all assets have the same reward to risk ratio D. Because all assets have the same systematic risk E. Because all assets have the same average amount of systematic risk
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Which of the following statements is true? Select one: Total risk = market risk + unique risk. Total risk = systematic risk + undiversifiable risk. Total risk = unique risk + diversifiable risk Market risk = undiversifiable risk + systematic risk. Total risk = diversifiable risk + firm-specific risk.
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