A Beta Coefficient of +1 Represents an Asset That ________

question 32

Multiple Choice

A beta coefficient of +1 represents an asset that ________.

• A) is more responsive than the market portfolio
• B) has the same response as the market portfolio
• C) is less responsive than the market portfolio
• D) is unaffected by market movement

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and entitles the shareholder to vote on corporate matters.

Stockholders' Equity

Signifies the stake of shareholders in a corporation, determined by subtracting total liabilities from total assets.

Preference Rights

A set of privileges or priorities given to shareholders, such as the right to purchase new shares before the general public.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, usually with fixed dividends.