An Increase in the Beta of a Corporation Indicates ____________

question 5

Multiple Choice

An increase in the beta of a corporation indicates ____________, and, all else being the same, results in___________.

• A) an increase in risk; a higher required rate of return and hence a lower share price.
• B) an increase in risk; a lower required rate of return and hence a higher share price.
• C) a decrease in risk; a lower required rate of return and hence a higher share price.
• D) a decrease in risk; a higher required rate of return and hence a lower share price.

---

Definitions:

Credits

Entries in accounting that increase liabilities or equity, or decrease assets, representing the opposite of debits.

Adjusting Entries

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.

Accounts

Records within an accounting system that are used to store and summarize transactions related to specific assets, liabilities, equity, revenue, and expenses.