Calculate the Consumption Beta for an Asset with a Variance $0.15$

question 39

Multiple Choice

Calculate the consumption beta for an asset with a variance of 10%,where the variance of consumption growth is 15% and the covariance between the growth rate in consumption and the asset is 20%.

• A) \( 0.15 \)
• B) \( 1.00 \)
• C) \( 1.25 \)
• D) \( 1.33 \)

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Definitions:

Increased Thirst

An abnormally strong desire to drink fluids, often a symptom of dehydration or a sign of a significant medical condition like diabetes.

Decreased Cardiac Output

A condition where the heart pumps less blood than normal, affecting the body's ability to supply oxygen and nutrients to tissues.

Myocardial Contractility

Measure of stretch of the cardiac muscle fiber. It can also affect stroke volume and cardiac output. Poor contraction decreases the amount of blood ejected by the ventricles during each contraction.

Low-fat Diet

A diet that restricts the intake of fats, particularly saturated fats and cholesterol, to promote heart health and reduce obesity risk.