What Is the Beta of a Risk-Free Security

question 29

Multiple Choice

What is the beta of a risk-free security?

• A) 0.00
• B) 0.50
• C) 1.00
• D) 1.50
• E) 2.00

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Definitions:

Subsidiary Entity

A company that is controlled by another company, known as the parent company, typically through ownership of more than half of its voting stock.

Business Combination

Transactions or events that result in the merger of two or more companies, leading to the formation of a single entity.

Non-controlling Interest

A stake in a corporation where the ownership percentage does not grant the holder significant influence over the company’s operations and decisions.

Inventory

Goods or materials that a business holds for the purpose of selling them or turning them into products for sale.