uppose that you have a stock with a market beta of zero. This means that (A) the stock has no risk for an investor when held alone. (B) the stock adds no risk when held in a market portfolio. (C) the stock ́s returns must have a standard deviation of zero. (D) the expected return on this stock must be zero or negative. (E) this stock ́s returns must be uncorrelated with the market returns.
uppose that you have a stock with a market beta of zero. This means that (A) the stock has no risk for an investor when held alone. (B) the stock adds no risk when held in a market portfolio. (C) the stock ́s returns must have a standard deviation of zero. (D) the expected return on this stock must be zero or negative. (E) this stock ́s returns must be uncorrelated with the market returns.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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5. Suppose that you have a stock with a market beta of zero. This means that
(A) the stock has no risk for an investor when held alone.
(B) the stock adds no risk when held in a market portfolio.
(C) the stock ́s returns must have a standard deviation of zero.
(D) the expected return on this stock must be zero or negative.
(E) this stock ́s returns must be uncorrelated with the market returns.
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