A Proxy Beta Is

question 33

Multiple Choice

A proxy beta is

• A) the average beta of firms that are only engaged in the proposed new line of business.
• B) the industry average beta that is used in lieu of the firm's beta because the firm has not existed long enough to have a beta calculated.
• C) the beta used when the firm has a great deal of business risk.
• D) None of these choices are correct.

---

Definitions:

Secure Identities

The development or maintenance of a strong and stable sense of self in various contexts.

Psychosocial Moratorium

A period during adolescence when adult responsibilities are postponed as young people explore various commitments, values, and roles.

"MAMA" Cycle

An acronym for "Moratorium-Achievement-Moratorium-Achievement," describing a cycle of identity exploration and commitment.

Crisis

A critical or difficult situation that requires immediate action for resolution.