Which of the Following Statements Is NOT True Regarding Beta

question 29

Multiple Choice

Which of the following statements is NOT true regarding beta?

• A) Beta will have a value of less than 1.0 if the firm's returns are less volatile than the market.
• B) Beta will have a value of greater than 1.0 if the firm's returns are more volatile than the market.
• C) Beta will have a value of equal to 1.0 if the firm's returns are of equal volatility to the market.
• D) All of the statements above are true.

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Definitions:

Break Up Value

The estimated total value of a company if its assets were sold separately rather than as a going concern.

Asset Play

An investment strategy based on buying stocks of companies that are considered to have undervalued assets by the investors.

Forecast Future Earnings

The process of predicting a company's future profits based on historical data, current trends, and analysis of the firm's industry and economy.

Securities Analysis

The process of evaluating a security (stocks, bonds, etc.) in terms of its risk, value, and investment potential.