The Formula for Calculating Beta Is Given by Dividing the ___________

question 41

Multiple Choice

The formula for calculating beta is given by dividing the ___________ of the stock with the market portfolio by the ___________ of the market portfolio.

• A)variance; covariance
• B)covariance; variance
• C)standard deviation; variance
• D)expected return; variance
• E)expected return; covariance

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Definitions:

Semiannual Interest

Interest that is calculated and paid twice a year, often used in bond and loan agreements.

Discount on Bonds Payable

The difference by which the bond's face value exceeds its selling price, reducing the cost to the issuer.

Straight-Line Method

A method of calculating depreciation of an asset which assumes the asset will lose an equal amount of value each year over its useful life.

Times Interest Earned Ratio

A financial metric that measures a company's ability to meet its interest payments on outstanding debt.