19.If a security is more volatile than the market as a whole,it will have a beta,whereas if a security is less volatile than the market as a whole,it will have a beta (a)equal to 1;less then 1 (b)greater than 2;greater than I (c)less than 1;greater than 1 (d)greater than 1:less than 1 Answer:(d) 20.If you are examining a stock that has a beta of 2,according to the CAPM,what should be its expected rate of return?Let the market risk premium=0.07. (a)the risk-free rate plus 0.035 (b)the risk-free rate plus 0.07 (c)the risk-free rate plus 0.14 (d)the risk-free rate plus 2.00 Answer:(c) 21. refers to the difference between the average rate of return on a security or a portfolio of securities and its SML relation. a. Alpha b. Beta c. Delta d Gamma Answer:(a) 22.A beta of 1.5 for a security indicates (a)the security has below average market-related risk (b)the security has no market-related risk (c)the security has above average market-related risk (d)the security has average market-related risk Answer:(c) 13-613-6 19. If a security is more volatile than the market as a whole, it will have a beta ________, whereas if a security is less volatile than the market as a whole, it will have a beta ________. (a) equal to 1; less then 1 (b) greater than 2; greater than 1 (c) less than 1; greater than 1 (d) greater than 1; less than 1 Answer: (d) 20. If you are examining a stock that has a beta of 2, according to the CAPM, what should be its expected rate of return? Let the market risk premium = 0.07. (a) the risk-free rate plus 0.035 (b) the risk-free rate plus 0.07 (c) the risk-free rate plus 0.14 (d) the risk-free rate plus 2.00 Answer: (c) 21. ________ refers to the difference between the average rate of return on a security or a portfolio of securities and its SML relation. a. Alpha b. Beta c. Delta d. Gamma Answer: (a) 22. A beta of 1.5 for a security indicates ________. (a) the security has below average market-related risk (b) the security has no market-related risk (c) the security has above average market-related risk (d) the security has average market-related risk Answer: (c)