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Exam Series 6 All Questions

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Exam Series 6 topic 1 question 224 discussion

Actual exam question from FINRA's Series 6
Question #: 224
Topic #: 1
[All Series 6 Questions]

Anna Lyst observes that the beta of a certain stock is 0.8. This means that:

  • A. if the S&P 500 Index loses 10%, this stock can be expected to lose 8%.
  • B. the stock is 80% more volatile than the S&P 500 Index.
  • C. if the S&P 500 Index is up 10%, this stock can be expected to lose 8%.
  • D. the stock is riskier than the overall market.
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Suggested Answer: A 🗳️
If the beta of a stock is 0.8, it means that if the S&P 500 Index loses 10%, this stock can be expected to lose 8%. Beta is a measure of how a stock or a portfolio of stocks moves with the overall market, and the S&P 500 Index is commonly used as a proxy for the overall market. A beta of 0.8 means that the stock is less risky than the market, which has a beta of 1.0.
by lolojepu at April 6, 2025, 1:26 a.m.

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