The beta of Royal Bank stock is 0.714 while the beta of Bristol Myers Squib is 0.461. Which of the following statements is most accurate?

Question

The beta of Royal Bank stock is 0.714 while the beta of Bristol Myers Squib is 0.461.  Which of the following statements is most accurate?

Answer

If the market return is forecast at 20% over the next year, then we would expect returns of just over 14% for RY and just over 9% for BMY during the same time period

Answer

Both RY and BMY stock are expected to fluctuate more in value than the market

Answer

Investors will expect RY stock to be more stable than BMY stock

Answer

It is not possible to determine expected returns because we do not know the market beta

Answer

The risk BMY stock can be more easily diversified away than the risk of RY stock

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The beta of Royal Bank stock is 0.714 while the beta of Bristol Myers Squib is ...

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