Beta Measures the Marginal Contribution of a Stock to the Risk

question 42

True/False

Beta measures the marginal contribution of a stock to the risk of a well-diversified portfolio.

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Definitions:

Purchase Price

The amount of money paid to buy a good, service, or asset; fundamental in calculating the basis for investment or tax purposes.

Capital Loss Deduction

A tax deduction that allows individuals to offset their capital gains with any losses they incurred on investments in a given tax year.

Carryover

Unused tax credits or deductions that can be applied to future tax years to reduce tax liability.

Short-term Loss

A loss realized on the sale or exchange of an asset held for one year or less.