Which of the Following Statements About the Beta Coefficient of a Stock

question 155

Multiple Choice

Which of the following statements about the beta coefficient of a stock is true?

• A)A beta of > 1 implies that the stock's volatility is less than that of the market.
• B)A beta of
• C)A beta of 1 implies a volatility independent of the market's volatility.
• D)A beta of.

---

Definitions:

Allowance Method

An accounting technique used to estimate and record uncollectible accounts receivable, reducing the net value of accounts receivable to an amount expected to be collected.

Credit Sales

Sales in which revenue is recognized at the point of sale but payment is deferred till a later date, typically employed in business-to-business transactions.

Uncollectible Accounts

Receivables that are deemed to be uncollectable from debtors, leading to their recognition as a loss.

Credit Policy

Guidelines that define the credit limits and terms extended by a business to its customers.