Assignment on beta coefficient

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Beta coefficient

Stock X has a beta of 0.40 and Stock Y has a beta of 1.20.  Which of the following statements must be true about these securities?  (Assume the market is in equilibrium.)

a.   The required return on Stock Y will be greater than that on Stock X.

b.   Stock X would always be a more desirable addition to a portfolio than Stock Y.

c.   The required return on Stock X and Stock Y will be the same.

d.   When held in isolation, Stock Y has more risk than Stock X.

e.   Stock Y would always be a more desirable addition to a portfolio than Stock X.

Reference no: EM133123047

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