An Increase in the Beta of a Corporation, All Else

question 71

Multiple Choice

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

• 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:

Data Handling

The process of collecting, storing, processing, and managing data.

Extranets

Private networks that use Internet technology to share part of a business's information or operations with suppliers, vendors, partners, customers, or other businesses.

Electronic Commerce

Buying and selling goods and services through use of the internet.

Operational Effectiveness

The ability of an organization to perform activities efficiently and produce outputs effectively.