The Beta of a fiRm Is More Likely to Be

question 38

Multiple Choice

The beta of a firm is more likely to be high under what two conditions?

• A)High cyclical business activity and low operating leverage.
• B)High cyclical business activity and high operating leverage.
• C)Low cyclical business activity and low financial leverage.
• D)Low cyclical business activity and low operating leverage.
• E)None of the above.

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Definitions:

Pat Buchanan

An American political commentator, author, and politician known for his conservative views.

Ralph Nader

An American political activist, author, lecturer, and attorney noted for his involvement in consumer protection, environmentalism, and government reform movements.

Anita Hill

An American lawyer and academic, known for accusing U.S. Supreme Court nominee Clarence Thomas of sexual harassment in 1991.

Clarence Thomas

An Associate Justice of the Supreme Court of the United States, nominated by President George H.W. Bush, and known for his conservative judicial philosophy.