Cranston Cranks Inc. is a manufacturer of high quality bicycle compone

Cranston Cranks Inc. is a manufacturer of high quality bicycle components. The firm’s levered beta is equal to 1.20. When added to a well-diversified portfolio that matches the market beta, the firm would ________ the portfolio beta.

A) increase
B) decrease
C) not affect
D) There is insufficient information to answer this question.

ANSWER

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