The Beta of a Security Is Calculated By

question 99

Multiple Choice

The beta of a security is calculated by:

• A)dividing the covariance of the security with the market by the variance of the market.
• B)dividing the correlation of the security with the market by the variance of the market.
• C)dividing the variance of the market by the covariance of the security with the market.
• D)dividing the variance of the market by the correlation of the security with the market.
• E)None of the above.

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Definitions:

Government of Canada Bond

A debt security issued by the Canadian government to support government spending.

Maturity Date

The specified date on which the final payment of a loan, bond, or other financial instrument must be paid in full.

Par Value

The face value of a bond or stock, as stated by the issuing company.

Coupon

The interest payment made to the bondholders during the life of the bond.