Response to expected run-up in stock market

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Reference no: EM131893188

Assume that you are about to select a specific stock that will perform well in response to an expected run-up in the stock market. You are very confident that the stock market will perform well in the near future. Recently, a friend recommended that you consider purchasing stock of a specific firm because it had decent earnings over the last few years, it has a low beta (reflecting a low degree of systematic risk), and its beta is expected to remain low. You normally rely on beta as a measurement of a firm’s systematic risk. Should you seriously consider buying that stock? Explain.

Reference no: EM131893188

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