If Last Month a Stock with Beta of 1

question 35

Multiple Choice

If last month a stock with Beta of 1.0 lost two percent while the TSX 300 had a one percent gain, then it appears that:

• A)Beta has been calculated incorrectly
• B)The S&P 500 cannot represent the market
• C)Betas are long-term "best fit" averages, not short-term stock measures
• D)The market index had a good month

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Definitions:

Negligent Preparation

Refers to the lack of reasonable care in the preparation of documentation or products, potentially leading to harm or loss.

Financial Statements

are formal records of the financial activities and position of a business, person, or other entity, presenting the financial performance over a specific period.

Rule 10b-5

A regulation under the Securities Exchange Act of 1934 that prohibits any act or omission resulting in fraud or deceit in connection with the sale or purchase of any security.

Securities Exchange Act

Also known as the Securities Exchange Act of 1934, it regulates the trading of securities in the U.S. and established the Securities and Exchange Commission (SEC).