A Beta Coefficient of -1 Represents an Asset That ________

question 65

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 but in opposite direction
• C) is less responsive than the market portfolio
• D) is unaffected by market movement

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Definitions:

External Costs

Costs caused by a business activity that are not borne by the business itself, but by other people or the environment.

External Benefits

Benefits from an economic activity experienced by parties not directly involved in the transaction, often leading to positive spillovers in society.

Subsidizing Production

The act of providing financial support to companies or industries to reduce the cost of producing goods or services, often to encourage production or lower prices for consumers.

External Costs

Costs that affect parties who are not directly involved in the production or consumption of a good or service, often leading to market failures.