A Beta Coefficient of -1 Represents an Asset That

question 89

Multiple Choice

A beta coefficient of -1 represents an asset that

• A) is more responsive than the market portfolio.
• B) is unaffected by market movement.
• C) is less responsive than the market portfolio.
• D) has the same response as the market portfolio but in opposite direction.

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Definitions:

Budget Line

A graphical representation of all possible combinations of two goods that an individual can afford given their income and the prices of the goods.

Indifference Curve

A graph that shows different combinations of two goods or services among which a consumer is indifferent, illustrating preferences and trade-offs.

Total Utility

The total satisfaction received from consuming a certain amount of goods or services.

Marginal Rate of Substitution

The rate at which a consumer is willing to give up one good in exchange for another good, while keeping overall utility constant.