Beta Measures

question 33

Multiple Choice

Beta measures:

• A) the ability to diversify risk.
• B) how an asset covaries with the market.
• C) the actual return on an asset.
• D) the standard of the assets' returns.

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Definitions:

Forward Exchange Contracts

Financial derivatives that lock in an exchange rate today for the purchase or sale of a currency on a future date.

Financial Instruments

Deals that create a financial asset for one entity and simultaneously generate either a financial liability or an equity instrument for another entity.

Accounts Payable

Liabilities to suppliers or creditors for goods, services, or supplies purchased on credit and not yet paid for.

Ordinary Shares

Shares of a company providing voting rights and entitling the holder to dividends, representing ownership in a corporation.