Use the Information for the Question(s)below

question 92

Multiple Choice

Use the information for the question(s) below.
Suppose the market portfolio's excess return tends to increase by 30% when the economy is strong and decline by 20% when the economy is weak.A type S firm has excess returns that increase by 45% when the economy is strong and decrease by 30% when the economy is weak.A type I firm will also have excess returns of either 45% or -30%,but the type I firm's excess returns will depend only upon firm-specific events and will be completely independent of the state of the economy.
-What is the beta for a type I firm?

• A)1.0
• B)0.75
• C)0.0
• D)1.5

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Definitions:

Foster Parent Families

Families that provide a temporary home and care for children who are in the custody of the state, due to being orphaned, abandoned, or abused.

Sandwich Generation

The generation of middle-aged people who are supposedly “squeezed” by the needs of the younger and older members of the families.

Middle-aged Women

Women who are in the middle stage of life, typically considered to be between the ages of 40 and 60.

Kinkeeper

Someone who becomes the gatherer and communication hub for their family.