Which of the Following Statements Is True

question 60

Multiple Choice

Which of the following statements is true?

• A)An average stock has a beta of 1.0.
• B)A stock having a beta of greater than 1.0 is a higher-than-average-risk stock.
• C)A stock having a beta of less than 1.0 is a lower-than-average-risk stock.
• D)All of the above.
• E)None of the above.

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Definitions:

Common Stock

A type of security that signifies ownership in a corporation, entitling the shareholder to a share of the corporation's profits and assets.

Consolidated Earnings Per Share

A calculation of the earnings per share of a parent company and its subsidiaries, providing a measure of the combined profitability on a per-share basis.

Convertible Securities

Convertible securities are financial instruments, like bonds or preferred stocks, that can be converted into a predetermined number of the issuer's equity shares.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company, known as the parent company.