The Beta for the Market Portfolio Is Closest To

question 55

Multiple Choice

The beta for the market portfolio is closest to:

• A)1.
• B)0.
• C)Unable to answer this question without knowing the market's expected return.
• D)Unable to answer this question without knowing the market's volatility.

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Definitions:

Perpetuity

A type of annuity that pays a fixed amount of money to an individual indefinitely, without a termination date.

Interest Rate

The percentage of principal charged by the lender for the use of its money or the rate earned on savings or investments.

Perpetual Payments

Payments that continue indefinitely, often associated with perpetuities in finance.

Annual Perpetuity

A type of financial annuity that makes consistent annual payments to the holder indefinitely.