NAIMMCQ Economics A stock has an expected return of 5.5% and a Beta of .80. By how much will the excess return of the stock change if the excess return of the S&P 500 falls by 1%?

A stock has an expected return of 5.5% and a Beta of .80. By how much will the excess return of the stock change if the excess return of the S&P 500 falls by 1%?

Economics

A stock has an expected return of 5.5% and a Beta of .80. By how much will the excess return of the stock change if the excess return of the S&P 500 falls by 1%?

A) It will fall by 1.2%
B) It will rise by 1.2%
C) It will fall by .8%
D) It will rise by .8%

Answer: C

NAIMMCQ

A stock has an expected return of 5.5% and a Beta of .80. By how much will the excess return of the stock change if the excess return of the S&P 500 falls by 1%?

A stock has an expected return of 5.5% and a Beta of .80. By how much will the excess return of the stock change if the excess return of the S&P 500 falls by 1%?

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