Use the Information for the Question(s)below

question 20

Multiple Choice

Use the information for the question(s) below.
Suppose the market portfolio's excess return tends to increase by 30% when the economy is strong and decline by 20% when the economy is weak.A type S firm has excess returns that increase by 45% when the economy is strong and decrease by 30% when the economy is weak.A type I firm will also have excess returns of either 45% or -30%,but the type I firm's excess returns will depend only upon firm-specific events and will be completely independent of the state of the economy.
-What is the Beta for a type I firm?

• A)1.0
• B)0.75
• C)0.0
• D)1.5

---

Definitions:

Common Labor Laws

Laws that regulate the legal obligations between employers and workers, including wages, working hours, safety, and rights to organize.

Free Trade Economists

Economists who advocate for the reduction of barriers to international trade, such as tariffs and quotas, to promote economic efficiency and consumer choice worldwide.

Trade Policy

A government's strategy and regulations regarding international trade, including tariffs, trade agreements, and import/export controls.

Labor Standards

Regulations concerning the minimum socially acceptable conditions that workers should experience, which can include wages, working hours, and safety conditions.