Which One of the Following Statements Concerning Beta Is Correct

question 16

Multiple Choice

Which one of the following statements concerning beta is correct?

• A)The beta assigned to the overall market is zero.
• B)A stock with a beta of 1.2 earns a higher risk premium than a stock with a beta of 1.3.
• C)A stock with a beta of .5 has 50 percent more risk than the overall market.
• D)Beta is applied to the T-bill rate when computing the discount rate used for the dividend discount models.
• E)The higher the beta, the higher the discount rate used for the dividend discount models.

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Definitions:

Nonverbal Cues

Communication without words, using gestures, facial expressions, and body language.

Individual Gestures

Non-verbal communication actions performed by an individual, which convey meaning or messages without the use of words, such as hand movements or facial expressions.

Communication Competency

The skill and ability to effectively convey, receive, and interpret messages and information, facilitating understanding and interaction.

Nonverbal Signals

Communication that occurs without words, through body language, facial expressions, gestures, and other physical cues.