Which One of the Following Statements Concerning Beta Is Correct

question 76

Multiple Choice

Which one of the following statements concerning beta is correct?

• A)The beta assigned to the overall market is zero.
• B)A stock with a beta of 1.2 earns a higher risk premium than a stock with a beta of 1.3.
• C)A stock with a beta of .5 has 50 percent more risk than the overall market.
• D)Beta is applied to the T-bill rate when computing the discount rate used for the dividend discount models.
• E)The higher the beta, the higher the discount rate used for the dividend discount model.

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Definitions:

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A highly contagious bacterial infection of the respiratory tract characterized by severe hacking coughs followed by a high-pitched intake of breath that sounds like "whoop."

Crowing Sound

A sharp, harsh sound resembling the cry of a rooster, often associated with breathing difficulties.

Tidal Volume

The amount of air inhaled or exhaled during a normal breath at rest.

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