Last Month a Stock with a Beta of 1

question 36

Multiple Choice

Last month a stock with a beta of 1.0 lost 20% while the S&P 500 had a 10% gain.Given this,it is most likely that the:

• A) stock's beta has been calculated incorrectly.
• B) S&P 500 cannot represent the overall market.
• C) firm released some negative information about itself.
• D) the market index had an exceptionally good month.

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Definitions:

Debits

Accounting entries that increase an asset or expense account, or decrease a liability or equity account, recorded on the left side of an accounting ledger.

Account Receivable

The amount customers are required to pay a company for products or services received but for which payment has not yet been made.

Total Assets

Total assets represent the sum of all assets owned by an entity, including both current and non-current assets, indicating the total resources available to the entity.

Utility Company

A utility company is an organization that provides essential services to the public, such as water, electricity, natural gas, and sewage treatment.