The Systematic Risk of the Market Is Measured by A

question 89

Multiple Choice

The systematic risk of the market is measured by a:

• A) beta of 1.
• B) beta of 0.
• C) standard deviation of 1.
• D) standard deviation of 0.
• E) variance of 1.

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Definitions:

Annual Lease

A contract specifying the terms under which one party agrees to rent property owned by another party for a period of one year.

Normal Profit

The minimum amount of earnings that entrepreneurs must achieve to cover the cost of operating, essentially the breakeven point beyond which a business earns profit.

Implicit Costs

Indirect expenses related to business operations, such as opportunity costs, not directly paid out in cash.

Economic Profits

The excess of total revenue over total costs, including both implicit and explicit costs.