The Beta of a Firm Is More Likely to Be

question 36

Multiple Choice

The beta of a firm is more likely to be high under what two conditions?

• A) High cyclical business activity and low operating leverage
• B) High cyclical business activity and high operating leverage
• C) Low cyclical business activity and low financial leverage
• D) Low cyclical business activity and low operating leverage
• E) None of these.

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Definitions:

Biology

The scientific study of life and living organisms, including their structure, function, growth, evolution, and distribution.

Natural Selection

The mechanism of evolution proposed by Charles Darwin; the tendency of organisms that have favorable adaptations to their environment to survive and become the parents of the next generation. Evolution occurs when natural selection results in changes in allele frequencies in a population. Compare with artificial selection.

Organisms

Living beings that grow, reproduce, respond to external stimuli, and maintain homeostasis.

Hereditary Information

Genetic material passed from parents to offspring, determining inherited traits and characteristics.