If a Stock's Beta Is

question 13

Multiple Choice

If a stock's Beta is.8 during a period when the market portfolio was down by 10%, then, a priori, we could expect the return on this individual stock to:

• A)lose more than 10%.
• B)lose, but less than 10%.
• C)gain more than 10%.
• D)gain, but less than 10%.

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Definitions:

Capital Cost Allowance (CCA)

A tax deduction in certain jurisdictions for depreciation of property used in a business or for earning income.

Operating Cash Flow

The cash an organization generates from its normal business operations, indicating its ability to generate sufficient positive cash flow to maintain and grow its operations.

Interest Expense

Cost incurred by an entity for borrowed funds, which may include payments on loans, bonds, and lines of credit.

Tax Rate

The proportion of income that the government takes from a person or company as taxes.