If Beta of Debt Is Zero, Then the Relationship Between

question 9

Multiple Choice

If beta of debt is zero, then the relationship between equity beta and asset beta is given by:

• A) equity beta = 1 + [(Beta of assets)/(debt-equity ratio)]
• B) equity beta = (1 - Debt-equity ratio)(beta of assets)
• C) equity beta = (1 + Debt-equity ratio)(beta of assets)
• D) None of the above

---

Definitions:

Inner Loop

A loop that is nested within another loop, effectively operating as part of the outer loop's iteration process.

Input Data Validation

A process that checks and verifies the input data for correctness, completeness, and security before it is processed by the program.

Pretest Loop

A loop in programming that checks its condition before executing the body of the loop, ensuring the loop runs zero or more times.

Repetition

In programming, refers to the action of repeating a set of instructions a specified number of times or until a certain condition is met, often achieved through loops.