A Proxy Beta Is

question 84

Multiple Choice

A proxy beta is:

• A) the average beta of firms that are only engaged in the proposed new line of business.
• B) the industry average beta that is used in lieu of the firm's beta because the firm has not existed long enough to have a beta calculated.
• C) the beta used when the firm has a great deal of business risk.
• D) None of the options are correct.

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Definitions:

Termite Infestation

The presence and dwelling of termites in a structure, causing damage and potentially undermining the integrity of the property.

Misrepresentation

A false statement of fact made by one party to another party, which has the effect of inducing that party into a contract.

Voidable

A legal term referring to a contract or transaction that may be deemed invalid by one party, though it remains valid until annulled.

Fraudulent

Deceptive or dishonest behavior intended to result in financial or personal gain.