A Stock's Beta Measures The

question 56

Multiple Choice

A stock's Beta measures the:

• A)average return on the stock.
• B)variability in the stock's returns compared to that of the market portfolio.
• C)difference between the return on the stock and return on the market portfolio.
• D)market risk premium on the stock.

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Definitions:

Required Reserves

The minimum amount of funds that a bank or depository institution must hold in reserve against specified deposit liabilities.

Excess Reserves

are the funds that banks hold over and above the required minimum reserves mandated by the central bank.

Federal Reserve Banks

Part of the central banking system of the United States, responsible for implementing monetary policy, providing financial services, and supervising and regulating banks.

Depository Institutions

Financial institutions such as banks and credit unions that accept deposits from individuals and provide loans.