An Increase in the Beta of a Corporation Indicates ________

question 9

Multiple Choice

An increase in the beta of a corporation indicates ________, and, all else being the same, results in ________.

• A) a decrease in risk; a higher required rate of return and hence a lower share price
• B) an increase in risk; a higher required rate of return and hence a lower share price
• C) a decrease in risk; a lower required rate of return and hence a higher share price
• D) an increase in risk; a lower required rate of return and hence a higher share price

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Definitions:

Chaos Theory

Chaos theory deals with complex systems whose behavior appears random or unpredictable, emphasizing the sensitivity of such systems to initial conditions.

Organizational Learning

A process of creating, retaining, and transferring knowledge within an organization to improve performance and competitiveness.

Feedback

Information given to a person or system about their performance or behavior for the purpose of improvement.

Contingency Approach

A managerial strategy that suggests the most appropriate organizational behavior is dependent on the specifics of the situation.