An Industry Is Likely to Have a Low Beta If

question 19

Multiple Choice

An industry is likely to have a low beta if the:

• A) stream of revenues is stable and less volatile than the market.
• B) economy is in a recession.
• C) market for its goods is unaffected by the market cycle.
• D) Both stream of revenues is stable and less volatile than the market; and economy is in a recession.
• E) Both stream of revenues is stable and less volatile than the market; and market for its goods is unaffected by the market cyclE.

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Definitions:

Marginal Utility

The boost in satisfaction or usefulness experienced from consuming an additional unit of a good or service.

Hypothetical Consumer

An assumed average consumer used in economic and marketing models to predict the behavior of consumer populations.

Utility-Maximizing

A principle in economics whereby individuals seek to optimize their satisfaction or happiness through the consumption of goods and services.

Total Product Curve

A graphical representation showing how the quantity of output depends on the quantity of a variable input, holding all other inputs fixed.