Business Risk Will Not Affect a Firm's Beta,because Beta Is

question 64

True/False

Business risk will not affect a firm's beta,because beta is determined by the market and thus is outside the control of the firm.

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Definitions:

Saving

The portion of income not spent on current consumption, often put aside for future use or investments.

Disposable Income

Funds available to households for saving and spending once income taxes are deducted.

APC

Average Propensity to Consume, which is the fraction of income spent on consumption.

Gross Investment

The total amount of capital expenditure a company spends on maintaining and increasing the scope of its operations.