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NEW QUESTION: 1
Anna Lyst observes that the beta of a certain stock is 0.8. This means that:
A. the stock is riskier than the overall market.
B. if the S&P 500 Index loses 10%, this stock can be expected to lose 8%.
C. the stock is 80% more volatile than the S&P 500 Index.
D. if the S&P 500 Index is up 10%, this stock can be expected to lose 8%.
Answer: B
Explanation:
Explanation/Reference:
Explanation: If the beta of a stock is 0.8, it means that if the S&P 500 Index loses 10%, this stock can be expected to lose 8%. Beta is a measure of how a stock or a portfolio of stocks moves with the overall market, and the S&P 500 Index is commonly used as a proxy for the overall market. A beta of 0.8 means that the stock is less risky than the market, which has a beta of 1.0.