Use the Information for the Question(s)below

question 1

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 S firm?

• A)1.5
• B)0.0
• C)1.0
• D)0.75

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Definitions:

Conversion Costs

Expenses associated with converting raw materials into finished products, typically including labor and overhead costs.

Process Costing

An accounting method used to allocate costs to products that are nearly identical and produced in a continuous process.

Processing Department

A specific unit within a manufacturing facility where a particular process or sequence of operations is carried out.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on an average cost of all goods available for sale.