Use the Information for the Question(s)below

question 1

Multiple Choice

Use the information for the question(s) below.
Suppose the market portfolio's excess return tends to increase by 30% when the economy is strong and decline by 20% when the economy is weak.A type S firm has excess returns that increase by 45% when the economy is strong and decrease by 30% when the economy is weak.A type I firm will also have excess returns of either 45% or -30%,but the type I firm's excess returns will depend only upon firm-specific events and will be completely independent of the state of the economy.
-What is the Beta for a type S firm?

• A)1.5
• B)0.0
• C)1.0
• D)0.75

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Definitions:

Verbal Relationships

The connection and interaction between individuals through spoken or written language.

Prosocial Children

Children who exhibit behaviors that are intended to benefit others, such as sharing, comforting, or helping.

Reasoning

The process of thinking about something in a logical way in order to form a conclusion or judgment.

Inductive

An intellectual procedure that involves synthesizing a number of premises, deemed true or usually validated, to achieve a distinct conclusion.