Firm Can Change Its Beta Through Managerial Decisions, Including Capital

question 45

True/False

firm can change its beta through managerial decisions, including capital budgeting and capital structure decisions.

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Definitions:

Less Than Optimal

A situation or outcome that does not achieve the best possible or most desired performance level.

Disposition Effect

A phenomenon in behavioral finance where investors are more likely to sell assets that have increased in value, rather than those that have decreased.

Stock Broker

A professional intermediary who buys and sells shares on behalf of clients in exchange for a commission.

Capital Loss

A decrease in the value of an investment or asset compared to its purchase price, realized when the asset is sold.