Assume the Beta for the Stock Market in General Is

question 128

Multiple Choice

Assume the beta for the stock market in general is 1.0 and the beta for World-Wide Television Productions is 2.8.If the stock market increases in value by 5 percent,what is the expected increase in value for the World-Wide Productions stock?

• A)1 percent
• B)5 percent
• C)14 percent
• D)28 percent
• E)30 percent

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Definitions:

Cheques

Written, dated, and signed instruments that direct a bank to pay a specific sum of money to the bearer or a designated party.

Clearing Times

The time period it takes for a financial transaction to be processed and settled.

Lockbox System

A service offered by banks to companies for the collection of payments from customers, where the payments are sent directly to a post office box rather than to the company.

Treasury Bills

Short-term government securities issued at a discount from the face value and maturing in a year or less, representing a secure investment.