An Asset in the Australian Market Has a Consumption Beta $45 \%$

question 18

Multiple Choice

An asset in the Australian market has a consumption beta of 3.0.If the variance of the asset is 20% and the variance of the growth rate in consumption is 12.5%,what is the asset's covariance with the growth rate in consumption?

• A) \( 45 \% \)
• B) \( 37.5 \% \)
• C) \( 15 \% \)
• D) \( 60 \% \)

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Definitions:

Productivity

A measure of the efficiency of production, often calculated as the ratio of output to input in the production process.

Economic Policies

Measures and strategies implemented by governments to regulate and control the economy, including fiscal, monetary, and trade policies.

Richest Country

A country characterized by the highest levels of wealth, income, or economic productivity compared to others, often measured by GDP per capita.

Real GDP

Gross Domestic Product adjusted for changes in the price level, providing a more accurate reflection of an economy's size and growth.