Which One of These Statements Related to Beta Is Correct

question 47

Multiple Choice

Which one of these statements related to beta is correct?

• A)A firm with a given sales cyclicality can reduce its beta by replacing variable production costs with fixed costs.
• B)The beta of debt is generally assumed to equal the market beta.
• C)Highly cyclical stocks tend to have low betas.
• D)The levered beta of equity exceeds the asset beta.
• E)Stocks with a high variance must have a high beta.

---

Definitions:

Ethnography

A qualitative research method used in social sciences to study cultures and communities through direct observation, participant observation, and other immersive techniques.

Cultural Activities

Events and practices that embody the traditions, customs, and expressions of a particular community or society.

Evolutionary Processes

These are mechanisms by which species undergo changes over time, including natural selection, mutation, gene flow, and genetic drift.

Validity

Refers to the extent to which a test or instrument measures what it is supposed to measure.