Market Risk Refers to the Tendency of a Stock to Move

question 105

True/False

Market risk refers to the tendency of a stock to move with the general stock market.A stock with above-average market risk will tend to be more volatile than an average stock, and its beta will be greater than 1.0.

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Definitions:

Operating Activities

The section of a business's cash flow statement that accounts for its core business operations' cash inflows and outflows, involving receipts from sales, payments to suppliers, and payroll.

Prepaid Expenses

Costs that have been paid in advance for goods or services to be received in the future, recorded as an asset on the balance sheet.

Net Income

The remaining profit after deducting all operating expenses, taxes, and additional costs from the total revenue.

Indirect Method

The indirect method is a way of calculating cash flows from operating activities by starting with net income and adjusting for non-cash transactions.