A Security's Beta Coefficient Will Be Negative If ________

question 27

Multiple Choice

A security's beta coefficient will be negative if ________.

• A) its returns are negatively correlated with market-index returns
• B) its returns are positively correlated with market-index returns
• C) its stock price has historically been very stable
• D) market demand for the firm's shares is very low

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Definitions:

Quantity of Output

Refers to the total amount of goods or services produced by a company over a specific period.

Costs

The total expenses incurred by a business in producing goods or providing services.

Variable Cost

relates to expenses that vary directly with the level of production or business activity, such as raw materials and labor costs.

Contribution Margin

The selling price per unit minus the variable cost per unit, used to cover fixed costs and to generate profit.