Consider the Following Average Annual Returns for Stocks a and B

question 74

Multiple Choice

Consider the following average annual returns for Stocks A and B and the Market. Which of the possible answers best describes the historical betas for A and B?

• A) b_A > +1; b_B = 0.
• B) b_A = 0; b_B = −1.
• C) b_A < 0; b_B = 0.
• D) b_A < −1; b_B = 1.
• E) b_A > 0; b_B = 1.

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Definitions:

Directors

Individuals elected by shareholders to oversee the management and make major policy and financial decisions for a corporation.

Officers

Individuals appointed or elected to manage and oversee the daily operations of a corporation, often holding specific titles such as CEO, CFO, or President.

Proxy

A person authorized to act on behalf of another, or the authority to represent someone else, especially in voting.

Shareholder

An individual or entity that owns one or more shares of stock in a corporation, thus having an interest in its performance and governance.