If a Stock Consistently Goes Down (Up)by 1

question 27

Multiple Choice

If a stock consistently goes down (up) by 1.6% when the market portfolio goes down (up) by 1.2%,then its beta equals:

• A) 1.04.
• B) 1.24.
• C) 1.33.
• D) 1.40.

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Definitions:

Pragmatists

Individuals who approach problems and decisions based on practical considerations, often focusing on the consequences and practical effects rather than theoretical principles.

Golden Rule

A moral or ethical guideline suggesting that one should treat others as one would like others to treat oneself.

Evidence

Information or proof presented to support or refute a claim, argument, or hypothesis in various contexts, including law, science, and everyday decision making.

Profit-Maximizing Climate

An environment in business operations where the primary focus is on increasing profits to the highest possible level.