The Beta of a Security Is Equal to _________

question 27

Multiple Choice

The beta of a security is equal to _________.

• A) the covariance between the security and market returns divided by the variance of the market's returns
• B) the covariance between the security and market returns divided by the standard deviation of the market's returns
• C) the variance of the security's returns divided by the covariance between the security and market returns
• D) the variance of the security's returns divided by the variance of the market's returns

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Definitions:

Break-Even Point

The point where total costs equal total revenue, meaning no profit or loss is incurred.

MC

Stands for Marginal Cost, which is the cost of producing one additional unit of a good or service.

ATC

Average Total Cost, which is the total cost per unit of output incurred when producing goods or services. It includes both fixed and variable costs.

MR

An abbreviation for Marginal Revenue, which is the additional income from selling one more unit of a good or service.