A Security That Is Completely Uncorrelated (ρ_j,m = 0) with the Market

question 32

Multiple Choice

A security that is completely uncorrelated (ρ_j,m = 0) with the market portfolio would have a beta of ____.

• A) -1
• B) 0
• C) +1
• D) -100

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Definitions:

Main Effect

The overall impact of an independent variable on a dependent variable in an experiment, analyzing the significant changes or differences.

Factor B

A variable or element in an experiment or model that is manipulated to determine its effect on outcomes, often used in factorial designs.

Interaction Effect

Occurs when the effect of one independent variable on the dependent variable differs depending on the levels or values of another independent variable.

F-Ratio

The ratio used in analysis of variance (ANOVA) to compare the variance between groups to the variance within groups.