Which of the Following Statements Is True

question 17

Multiple Choice

Which of the following statements is true?

• A)A stock with a beta of zero has a very low level of systematic risk.
• B)A stock with a beta greater than 1.0 has lower nondiversifiable risk than a stock with a beta of 1.0.
• C)A stock with a beta less than 1.0 has lower nondiversifiable risk than a stock with a beta of 1.0.
• D)A stock with a beta less than 1.0 has higher nondiversifiable risk than a stock with a beta of 1.0.

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Definitions:

Marginal Product

The additional output produced as a result of using one extra unit of a particular input.

Average Product

Average Product is the output produced, on average, by each unit of a variable factor of production, such as labor, calculated by dividing total product by the number of variable input units used in production.

Total Product

The total quantity of output produced by a firm for a given quantity of inputs over a specified period.

Marginal Product

The additional output that is produced by adding one more unit of a specific input, holding all other inputs constant.