Type of risk in which beta is equal to one is classified as____________?
Correct answer: D. Average risk stock
- A. Multiple risk stock
- B. Varied risk stock
- C. Total risk stock
- D. Average risk stock
Explanation
A beta of one means the stock's systematic risk and expected market movement are average relative to the market portfolio. Such a stock is therefore described here as an average-risk stock.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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