In Normal Market Conditions If a Security Has a Negative

question 9

Multiple Choice

In normal market conditions if a security has a negative beta:

• A) the security always has a positive return.
• B) the security has an expected return above the risk-free return.
• C) the security has an expected return less than the risk-free rate.
• D) the security has an expected return equal to the market portfolio.
• E) Both the security always has a positive return; and the security has an expected return above the risk-free return.

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Definitions:

Adjusted Trial Balance

is a list of all accounts and their balances after making adjustments, used to verify the equality of debits and credits.

Net Income

The income a company retains following the subtraction of all costs and taxes from its total revenue.

Income Statement

A financial statement that shows a company’s revenues and expenses over a specific period, ending with net income or loss.

Adjusted Trial Balance

A list of all accounts and their balances after adjustments are made, used to verify the balance of debits and credits.