i. ii. Iv are correct statements (i). if IBM starts investing more in projects with a lower market risk its equity beta will likely increase. (ii). if IBM decreases its leverage its equity beta will likely increase. (iv). if ibm decreases its leverage its equity beta will likely decrease.
The idea of beta quantifies how much a stock is predicted to change in relation to market trends.
A stock with a beta larger than 1.0 is thought to be more volatile than the overall market, whereas one with a beta below 1.0 is thought to be less volatile.
Instead of long-term risk, beta is arguably a better measure of short-term danger.
The stock is 59 percent volatile if the beta is 0.59.
Therefore, the correct options are i, ii, and iv.
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