The Part of a Stock's Return That Is Systematic Is

question 47

Multiple Choice

The part of a stock's return that is systematic is a function of which of the following variables?
I. Volatility in excess returns of the stock market
II. The sensitivity of the stock's returns to changes in the stock market
III. The variance in the stock's returns that is unrelated to the overall stock market

• A) I only
• B) I and II only
• C) II and III only
• D) I, II, and III

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Definitions:

Nonexcludable

A characteristic of a good or service indicating that it is not possible to prevent non-paying customers from accessing it.

Excludable

A property of a good whereby it is possible to prevent individuals from enjoying the good unless they pay for it.

Public Good

A good or service offered to every member of a society for free, provided by either governmental bodies or private entities or individuals, without seeking to make a profit.

Demand Curve

An illustrated chart that displays the connection between a product's price and the amount consumers are willing to buy at those price levels.