The Variable Beta

question 34

Multiple Choice

The variable beta

• A)measures the degree of liquidity in a portfolio.
• B)is the responsiveness of a stock's expected return to changes in the value of the complete market portfolio.
• C)measures the degree of idiosyncratic risk in the complete market portfolio.
• D)is always less for an individual portfolio than for the complete market portfolio.

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Definitions:

Gross Amount

The gross amount is the total figure before any deductions are made, such as expenses, taxes, or discounts.

Journal Entries

Recorded transactions in the accounting journals that represent the financial activities of a company, detailing debits and credits for account adjustments.

Average Cost

A method of inventory valuation that calculates the cost of goods sold and ending inventory based on the weighted average cost of all items.

Cost Flow Assumption

An accounting principle that determines the method used to assign costs to inventory and to cost of goods sold, including FIFO, LIFO, and average cost methods.