A Higher Beta for an Asset Reflects

question 77

Multiple Choice

A higher beta for an asset reflects

• A) lower risk.
• B) lower covariance between the asset's returns and market returns.
• C) higher covariance between the asset's returns and the market returns.
• D) none of the above

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Definitions:

Investment Grade

A credit rating indicating a low risk of default, used to classify bonds that are considered safe investments.

BBB

A bond credit rating given to a medium credit quality debt instrument, indicating moderate risk.

Primary Market Transaction

Deals with the issuance of new securities directly from the issuer to investors.

Secondary Market Transaction

The buying and selling of previously issued securities, such as stocks and bonds, between investors, rather than directly from issuing companies.