You Would Expect the Beta of Cyclical Industries to Be

question 21

Multiple Choice

You would expect the beta of cyclical industries to be ________ and the beta of defensive industries to be ________.

• A) greater than 1; less than 1
• B) less than 1; less than 1
• C) less than 1; greater than 1
• D) greater than 1; greater than 1

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Definitions:

Overhead Rate

A calculation used to allocate indirect costs to products or services, typically expressed as a percentage of direct labor, materials, or another base.

Activity-based Costing

A costing method that assigns overhead and indirect costs to specific products or activities based on their use of resources.

Allocation Base

A criterion or standard used to distribute costs across multiple cost objects.

Selling and Administrative Expenses

Costs incurred that are not directly tied to the production of goods, such as marketing and office expenses.