A Firm's Unlevered (Asset)beta Is

question 83

Multiple Choice

A firm's unlevered (asset) beta is:

• A)the weighted average of the equity beta and the debt beta.
• B)the weighted average of the levered beta and the equity beta.
• C)the debt beta minus the equity beta.
• D)the unlevered beta minus the cost of capital.

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Definitions:

Negotiability

The characteristic of a financial instrument that allows it to be transferred or assigned from one party to another, ensuring the receiving party obtains a good title.

Negotiable Instrument

A written order or unconditional promise to pay a fixed sum of money that is transferable from one party to another.

Movability

The quality of a negotiable instrument that ensures it is mobile and available.

Relative Permanence

The concept that certain things are not absolutely permanent but can be considered permanent relative to specific contexts or conditions.