Which One of the Following Is the Best Indication That

question 5

Multiple Choice

Which one of the following is the best indication that a security is correctly priced according to the Capital Asset Pricing Model?

• A)beta of zero
• B)beta of 1.0
• C)alpha of zero
• D)alpha of 1.0
• E)alpha of −1.0

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Definitions:

Deficiency

The shortfall amount between a debt owed and the proceeds from the sale of assets pledged to secure the debt.

Surplus

The amount of an asset or resource that exceeds the portion that is utilized.

Pennsylvania System

A penal system based on solitary confinement and rehabilitation of the prisoner.

General Contractor

A principal contractor who is responsible for the execution, completion, and day-to-day oversight of a construction project.