What Does an Asset Having a Negative Beta Value Imply

question 36

Multiple Choice

What does an asset having a negative beta value imply?

• A) non-existence because negative beta assets are theoretically impossible
• B) a necessary component to get a fully diversified portfolio
• C) a risk-reducing property when added to a portfolio
• D) the higher expected return of this asset

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Definitions:

Break-even

The point at which total revenues equal total costs, resulting in no profit or loss.

Sales Dollars

The total revenue a company generates from sales activities before any expenses are deducted.

Common Fixed Expenses

Expenses that do not change with the level of production or sales and are shared by different segments or products of a company.

Manufacturing Overhead

All indirect costs associated with manufacturing, including but not limited to utility costs, depreciation, and salaries of maintenance personnel.