A Stock with a Beta Greater Than 1

question 90

Multiple Choice

A stock with a beta greater than 1.0 would be termed:

• A) an aggressive stock, expected to increase more than the market increases.
• B) a defensive stock, expected to decrease more than the market increases.
• C) an aggressive stock, expected to decrease more than the market increases.
• D) a defensive stock, expected to increase more than the market decreases.

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Definitions:

Consumer Sovereignty

The determination by consumers of the types and quantities of goods and services that will be produced with the scarce resources of the economy; consumers’ direction of production through their dollar votes.

Legislation

Laws or legal statutes passed by a legislative body, governing body, or the process of enacting laws.

Market System

An economic system in which decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand.

Private Ownership

The holding of property by non-governmental legal entities or individuals, allowing control and use of the property according to the owner's preferences.