Use the Following Information to Answer the Question(s)below

question 84

Multiple Choice

Use the following information to answer the question(s) below.
Suppose that the market portfolio is equally likely to increase by 24% or decrease by 8%.Security "X" goes up on average by 29% when the market goes up and goes down by 11% when the market goes down.Security "Y" goes down on average by 16% when the market goes up and goes up by 16% when the market goes down.Security "Z" goes up on average by 4% when the market goes up and goes up by 4% when the market goes down.
-The beta for security "Z" is closest to:

• A)-1.00.
• B)-0.25.
• C)0.00.
• D)0.25.

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Definitions:

Annual Rate

Annual rate often refers to the interest rate for a period of one year, but can also apply to any annualized financial metric intended to allow comparison over a year's period.

Implied Annual Cost

The total cost associated with financing or an investment, expressed on a yearly basis, often calculated through the analysis of implied rates or costs.

Forgoing

The act of giving up or going without something, often in the context of making financial or investment decisions.

Discount

A reduction from the usual cost of something, or in finance, the process of determining the present value of future cash flows by applying a discount rate.