If a Stock Consistently Goes Down (Up)by 1

question 99

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:

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

---

Definitions:

Plantwide Rate

A single overhead absorption rate used throughout an entire factory or plant, applied uniformly to all cost objects irrespective of the department in which they were created.

Budgeted Activity Rate

The estimated overhead rate used for budgeting, calculated based on anticipated levels of activity.

Manufacturing Overhead Rate

The ratio used to allocate manufacturing overhead costs to products based on a cost driver, such as labor hours or machine hours.

Machine Hour

A unit of measure representing the operation of a machine for one hour, used in allocating manufacturing costs based on machine usage.