Use the Information for the Question(s)below

question 20

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:

Airway

The path that air follows to enter and leave the lungs, including the nose, mouth, pharynx, larynx, trachea, and bronchi.

Insulin

A hormone secreted by the islets of Langerhans in the pancreas.

Sugars

Simple carbohydrates that taste sweet and are used by the body for energy.