If the Beta of the Market Index Is 1

question 62

Multiple Choice

If the beta of the market index is 1.0 and the standard deviation of the market index increases from 12% to 18%,what is the new beta of the market index?

• A) 0.8
• B) 1.0
• C) 1.2
• D) 1.5

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Definitions:

New Products

Refers to items that have recently been introduced to the market or are in the development stage.

Internet-related Firms

Companies whose primary business activities, products, or services are based on the internet, including e-commerce, online services, and digital platforms.

Near-monopoly

A situation where a single company or entity dominates an industry or market, facing little to no competition but not having complete control.

Market Dominate

The ability of a firm or a group of firms to control a substantial share of the market, influencing prices, and competition.