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:

FIFO

"First In, First Out," an accounting method for valuing inventory where the first items placed in inventory are the first sold.

Current Costs

The costs that would have to be incurred to replace or reproduce an asset in the current period, under current market conditions.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a product.

Net Income

The total earnings of a company after accounting for all expenses, taxes, and additional income streams, representing the company’s profit.