In Terms of the Stock Market,systematic Risk Refers to the Fact

question 91

Multiple Choice

In terms of the stock market,systematic risk refers to the fact that

• A) some stocks have higher returns than others.
• B) some stocks' returns have a higher variance than others.
• C) all stock prices are correlated with the health of the economy.
• D) most stock prices are perfectly negatively correlated.

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Definitions:

Seasonal Product

A type of product whose demand and availability significantly depend on the season or time of the year.

Total Contribution Margin

The difference between sales revenue and total variable costs, indicating the amount contributing to covering fixed costs and profit.

Operating Leverage

The ratio of fixed costs to total costs. The higher a firm’s operating leverage, the greater will be the variability of profits for a given change in sales.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.