Use the Information for the Question(s)below

question 92

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

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Definitions:

Mood-Congruent Memory

The tendency of individuals to recall memories that are consistent with their current mood.

Chunking

A memory strategy that involves organizing information into manageable and meaningful units or chunks, facilitating easier recall.

Spacing Effect

Refers to the phenomenon where learning is more effective when study sessions are spaced out over time rather than conducted in one long session.

Iconic Memory

A type of visual sensory memory that briefly holds an image of a visual stimulus after its exposure.