Which of the Following Will NOT Affect a Firm's Beta

question 6

Multiple Choice

Which of the following will NOT affect a firm's beta?

• A) the choice of the market portfolio against which to compare the variability of a firm's returns
• B) the choice of the risk-free security
• C) the choice of the time period used to calculate the firm's beta
• D) None of the above, because each of them affects the calculation of a firm's beta.

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Definitions:

Variable Cost

Expenditures that fluctuate in accordance with production or sales figures, including costs for materials and workforce.

Fixed Costs

Expenses that do not change in relation to production volume or business activity level, such as rent or salaries.

Break-Even Point

The financial level at which total revenues equal total expenses, resulting in no net profit or loss.