In a Single Factor Market Model the Beta of a Share

question 38

Multiple Choice

In a single factor market model the beta of a share ________.

• A)measures the share's contribution to the standard deviation of the market portfolio
• B)measures the share's unsystematic risk
• C)changes with the variance of the residuals
• D)measures the share's contribution to the standard deviation of the share

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Definitions:

Budget Variance

The difference between the budgeted or baseline amount of expense or revenue, and the actual amount.

Insurance Rates

The cost per unit of coverage set by insurance companies, determining the premium paid by policyholders.

Volume Variance

The difference between the expected volume of sales or production and the actual volume, which affects budgeting and operational planning.

Fixed Manufacturing Overhead

Fixed manufacturing overhead refers to the costs associated with production that do not vary with the level of output, such as rent for factory buildings, salaries of certain staff, and equipment depreciation.