If Dexter Industries has a beta value of 1.0, then its

Return should equal the risk-free rate.
Price is relatively stable.
Expected return should approximate the overall market.
Volatility is low.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (C) is correct. The effect of an individual security on the volatility of a portfolio is measured by its sensitivity to movements by the overall market. This sensitivity is stated in terms of a stock’s beta coefficient. If the beta coefficient is 1.0, then the price of that stock tends to move in the same direction and to the same degree as the overall market.