Two Stocks That Have the Same Beta ____ Have the Same

question 38

Multiple Choice

Two stocks that have the same beta ____ have the same correlation because _______:

• A)may; because correlation measures the sensitivity of the S&P to the market portfolio.
• B)will; because correlation measures the tightness of fit around the regression line.
• C)may not; because correlation measures the tightness of fit around the regression line.
• D)may not; because correlation measures the sensitivity to change.
• E)None of the above.

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Definitions:

Fair Value

An estimate of the price at which an asset or liability could be exchanged in a current transaction between willing parties.

AASB 141

An Australian Accounting Standards Board standard that concerns agriculture, detailing the accounting for agricultural activity including the transformation of biological assets (living plants and animals) into agricultural produce.

IAS 41

The International Accounting Standard that deals with the accounting for agriculture, including the recognition and measurement of biological assets.

Biological Assets

Living plants or animals that are held by an entity for the purpose of selling them, producing agricultural produce, or providing services.