Which One of These Statements Related to Beta Is Correct

question 35

Multiple Choice

Which one of these statements related to beta is correct?

• A)The beta of a risk-free security is set at 1.
• B)The higher the beta,the lower the risk of a security.
• C)Beta measures the risk of a single security if held in a large,diversified portfolio.
• D)Beta measures the total risk of a single security whether held independently or as part of a portfolio.
• E)A stock with a high standard deviation will also have a high beta.

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Definitions:

Indirect Labor

Wages paid to employees who are not directly involved in production, but support the manufacturing process.

Production Department

A specific area or segment of a manufacturing company responsible for the actual production of goods.

Weighted Average Method

The weighted average method calculates the cost of inventory based on the average cost of all similar items in inventory, adjusted for the quantity of items.

Direct Labor

Labor costs associated with employees who are directly involved in the manufacturing process of a product.