A Stock with a Beta of Zero Would Be Expected

question 60

Multiple Choice

A stock with a beta of zero would be expected to:

• A) Have a rate of return equal to zero
• B) Have a rate of return equal to the market risk premium
• C) Have a rate of return equal to the risk-free rate
• D) Have a rate of return equal to the market rate of return

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Definitions:

Statement Of Cash Flows

A financial report that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.

Investing Activities

Transactions involving the acquisition or disposal of long-term assets and investments, reflected in a company's cash flow statement.

Financing Activities

This category in cash flow statements includes transactions related to raising capital and repaying investors, such as issuing stock or paying dividends.

Cash Flows

The inflow and outflow of cash and cash equivalents, representing the operating, investing, and financing activities of an entity over a period.