A Stock's Beta Measures The

question 37

Multiple Choice

A stock's beta measures the:

• A) average return on the stock.
• B) sensitivity of the stock's returns to those of the market portfolio.
• C) difference between the return on the stock and the return on the market portfolio.
• D) market risk premium on the stock.

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Definitions:

Book Value

The net value of a company's assets minus its liabilities and preferred stock, often compared to its market value.

Operating Cash Flow

The cash generated from a company’s normal business operations, indicating its ability to generate sufficient revenue to maintain operations.

CCA Class

Categories within the Canadian tax system that determine the depreciation rate for tax purposes on tangible capital assets, based on the type of asset and its expected life.

Tax Rate

The rate at which a person or business is taxed by the government on their earnings or revenue.