The Beta of a fiRm Is Determined by Which of the Following

question 11

Multiple Choice

The beta of a firm is determined by which of the following firm characteristics?

• A)Cycles in revenues.
• B)Operating leverage.
• C)Financial leverage.
• D)All of the above.
• E)None of the above.

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Definitions:

Inventory Turnover

A ratio indicating how often a company sells and replaces its stock of goods during a period, calculated as cost of goods sold divided by average inventory.

Cost of Goods Sold

The exact costs incurred in the creation of a company’s sold goods, including the expenses for materials and labor.

Average Inventory

An estimation of the amount of inventory a company typically holds over a specific period, calculated as the average of the beginning and ending inventory.

Net Income

The company's net income, calculated by deducting all costs, taxes, and losses from its total revenue.