Stock of Gould and Silber Inc

question 70

Multiple Choice

Stock of Gould and Silber Inc. has a beta of -1. If the market declines by 10%, Gould and Silber would be expected to

• A) decline by 10%.
• B) rise by 10%.
• C) not respond to market fluctuations.
• D) decline by 1%.

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Definitions:

Utility

A measure of satisfaction or happiness that consumers receive from consuming goods or services.

Income

The money that an individual or business receives in exchange for providing a good or service or through investing capital.

Risk-neutral

Refers to individuals or entities that are indifferent between choices with varying levels of risk, focusing solely on the possible outcomes' expected values.

Risk-loving

A preference or inclination for taking on risks where the potential for gains outweighs the potential losses, as opposed to risk-aversion.