A Firm Can Affect Its Beta Risk by Changing the Composition

question 63

True/False

A firm can affect its beta risk by changing the composition of its assets and by modifying its use of debt financing, but external factors do not have any bearing on a firm's beta. 

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Definitions:

Durable Power

A form of power of attorney that remains in effect even if the grantor becomes incapacitated or unable to make decisions.

Arbitration Agreements

Contracts in which parties agree to settle disputes outside of court, through an arbitration process.

Residential Care Facility

A housing option for individuals who need assistance with daily living activities but do not require the full-time health care services provided by a nursing home.

Power Of Attorney

A legal document authorizing one person to act on another's behalf in private affairs, business, or some other legal matter.