Beta Is Calculated by Finding the Co-Variance Between the Return

question 47

True/False

Beta is calculated by finding the co-variance between the return on the asset and the return on the market and dividing it by the variance of the return on the market.

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Definitions:

Efficient Allocations

The process of distributing resources in a way that optimally utilizes them to achieve maximum productivity and utility without any wastage.

Federal Gasoline Tax

A tax imposed by the federal government on the sale of gasoline, used primarily to fund transportation infrastructure projects like highways and bridges.

Substitutes

Products or services that can replace each other in use, such that an increase in the price of one leads to an increase in the demand for the other.

General Equilibrium

A condition in economics where supply and demand are balanced across all markets in the economy simultaneously.