If a Firm's Stock Returns Co-Vary Identically with Returns to a Market-Wide

question 10

Multiple Choice

If a firm's stock returns co-vary identically with returns to a market-wide portfolio,then its market beta from such a regression is:

• A) equal to zero.
• B) equal to one.
• C) less than one.
• D) greater than one.

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Definitions:

Payor Bank

The bank upon which a check is drawn and that is responsible for paying the amount specified on the check to the payee.

Collected

Refers to the process of gathering or accumulating items, information, or funds.

Electronic Funds Transfers

The transfer of money between accounts by electronic means rather than the use of cash or paper documents.

Float Time

The period between when a check is deposited into a bank account and the time the funds are available for use.