What Would Not Be True About a GNP Beta?
A)If $\beta$

question 4

Multiple Choice

What would not be true about a GNP beta?

• A)If a stock's \(\beta\) GNP = 1.5, the stock will experience a 1.5% increase for every 1% surprise increase in GNP.
• B)If a stock's \(\beta\) GNP = -1.5, the stock will experience a 1.5% decrease for every 1% surprise increase in GNP.
• C)It is a measure of risk.
• D)It measures the impact of systematic risk associated with GNP.
• E)None of the above.

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Definitions:

U.S. Dollar

The official currency of the United States and a standard unit of measurement for global financial transactions.

Triangle Arbitrage

A riskless profit strategy that takes advantage of discrepancies in exchange rates in different markets by conducting a series of conversions among three currencies.

Currency Market

Also known as the foreign exchange market (Forex), it's a decentralized global market where currencies are traded, determining the foreign exchange rates for every currency.

Equilibrium

A state where market supply and demand balance each other, and as a result, prices become stable.