Which of the Following Statements About Beta Is Correct

question 15

Multiple Choice

Which of the following statements about beta is correct?

• A)Firms with greater systematic risk volatilities than the market have betas that are less than 1.0, and firms with smaller systematic risk volatilities than the market have betas that are greater than 1.0.
• B)Firms with greater systematic risk volatilities than the market have betas that are greater than 1.0, and firms with smaller systematic risk volatilities than the market have betas that are less than 1.0.
• C)Firms with greater systematic risk volatilities than the market have betas that are less than zero, and firms with smaller systematic risk volatilities than the market have betas that are greater than zero.
• D)Firms with greater unsystematic risk volatilities than the market have betas that are less than 1.0, and firms with smaller unsystematic risk volatilities than the market have betas that are greater than 1.0.
• E)Firms with greater unsystematic risk volatilities than the market have betas that are greater than 1.0, and firms with smaller unsystematic risk volatilities than the market have betas that are less than 1.0.

---

Definitions:

Macroeconomics

The branch of economics that is concerned with the overall ups and downs in the economy.

Computer Engineers

Professionals who design, develop, and test computer systems and components such as processors, circuit boards, memory devices, and networks.

Services Society

A society where the economy is significantly driven by the provision of services rather than the production of goods.

Freshwater

Refers to water bodies like lakes, rivers, and ponds that have low salt concentrations compared to seawater.