Companies That Have Highly Cyclical Sales Will Have A

question 5

Multiple Choice

Companies that have highly cyclical sales will have a:

• A) low beta if sales are highly dependent on the market cycle.
• B) high beta if sales are highly dependent on the market cycle.
• C) high beta if sales are independent of the market cycle.
• D) low beta if sales are independent of the market cycle.

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Definitions:

Capital Goods

Goods that are used in producing other goods and services, rather than being bought by consumers. This includes machinery, buildings, and equipment.

Consumer Goods

Items produced for personal use by households.

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two goods, given a set of inputs consisting of resources and other factors.

Economic Growth

A rise in the output of goods and services in the economy, measured from one time period to another.