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

question 33

Multiple Choice

Calculate the consumption beta for an asset with a standard deviation of 10%,where the variance of consumption growth is 10% and the covariance between the growth rate in consumption and the asset is 0.015.

• A) \( 0.15 \)
• B) \( 0.50 \)
• C) \( 0.75 \)
• D) \( 1.50 \)

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Definitions:

Variable Factory Overhead

Expenses within a factory that fluctuate with production volume, such as utilities or materials used in production.

Units Produced

The total number of units of product created by a company during a specific period.

Budgeted Production Units

The number of units a company plans to produce over a specific period as estimated during the budgeting process.

Sales

Sales refer to the transactions in which goods or services are transferred from the seller to the buyer for money or value, representing the primary source of revenue for most businesses.