Which of the Following Statements Best Explains the Fact That

question 100

Multiple Choice

Which of the following statements best explains the fact that cyclical firms tend to have high betas?

• A) Their earnings are not stable.
• B) Their stocks are overpriced.
• C) Their earnings are less diversifiable.
• D) Their profit margins are small.

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Definitions:

Account

A record summarizing all the transactions pertaining to a single item in the financial statements.

Days

The basic unit of time, equal to 24 hours, used to measure duration from one midnight to the next.

Interest Earned

The amount of money made on an investment over a certain period of time due to interest.

Account

A record or arrangement by which an individual or organization keeps track of their financial transactions and balances with a financial institution.