Which One of the Following Statements Is Correct

question 204

Multiple Choice

Which one of the following statements is correct?

• A) A beta of 1.2 indicates that a security has less risk than the overall market.
• B) Treasury bills have a beta of zero.
• C) A stock with a beta of 1.4 has less systematic risk than a stock with a beta of.9.
• D) The risk premium associated with a stock will decrease as the beta of the stock increases.
• E) The beta of a diversified portfolio will approach zero as the number of stocks in the portfolio is increased.

Understand the concept and calculation of the break-even point in units and dollar sales.

Understand and calculate the degree of operating leverage for given sales data.

Calculate and interpret the contribution margin and the contribution margin ratio.

Analyze the relationship between fixed, variable, and total costs in determining profitability.

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Definitions:

Distributive Fairness

The perceived fairness of the outcomes received, including resources and rewards, within an organization or social system.

Emotional Contagion

The phenomenon where emotions and behaviors can be transferred from one person to another, often unconsciously, leading to shared feelings or mimics in groups.

Tendency

An inclination towards a particular characteristic or type of behavior.

Emotions

Complex psychological states that involve a subjective experience, physiological response, and behavioral or expressive response.