The Part of a Share's Return That Is Systematic Is

question 15

Multiple Choice

The part of a share's return that is systematic is a function of which of the following variables?
I. Volatility in excess returns of the share market
II. The sensitivity of the share's returns to changes in the share market
III. The variance in the share's returns that is unrelated to the overall share market

• A)I only
• B)I and II only
• C)II and III only
• D)I, II and III

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Definitions:

Costs

The total expenses incurred by a business in producing goods or providing services.

Variable Cost

relates to expenses that vary directly with the level of production or business activity, such as raw materials and labor costs.

Contribution Margin

The selling price per unit minus the variable cost per unit, used to cover fixed costs and to generate profit.

Operating Cash Flow

denotes the cash generated from a company’s normal business operations, indicating whether a company can maintain and grow its operations.