1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Agata [3.3K]
3 years ago
14

Which of the following statements is correct? a. A security's beta measures its diversifiable (firm-specific) risk relative to t

hat of other securities. b. A stock's beta is less relevant as a measure of risk to an investor with a well-diversified portfolio than to an investor who holds only one stock. c. A stock's beta can be calculated by comparing its returns to the market's returns over some time period because the beta coefficient measures a stock's volatility relative to market. d. If the returns of two firms are negatively correlated, one of them must have a negative beta. e. Combining stocks that are perfectly negatively correlated and that have the same beta coefficient into a portfolio is riskier than holding an individual stock, because the portfolio will not benefit from diversification.
Business
1 answer:
enyata [817]3 years ago
5 0

Answer:

C. A stock's beta can be calculated by comparing its returns to the market's returns over some time period because the beta coefficient measures a stock's volatility relative to market.

Explanation:

A stock`s beta is a risk assessment metric that is used to measure the volatility of a security in relation to the market. The metric compares the risk of an investment with the average market risk of that investment.

Since stock`s beta measures market risk in relation to the security,  it can be calculated by comparing its returns to the market`s returns over some time period which gives beta coefficient as a result.

If beta coefficient is above 1, it means the volatility of the security is high. If it`s 1, it means the security risk equals the market risk. If it is below 1, it means the security risk is less than the market risk.

Other options are wrong.

Option A is wrong because security`beta measures security risk in relation to the market, not other securities. Option B is wrong because stock`s beta is more relevant to an investor with well-diversified portfolio to measure risks across market.

Option D is wrong because returns can be negatively correlated without any of  the firm having negative beta

Option E is wrong because holding an individual stock is always riskier than combining stocks in a portfolio.

So only option C is right as described above.

You might be interested in
The growth rate in the fourth quarter of 2010 was 3.1%. What was the growth rate in the first quarter of 2011?
TiliK225 [7]
The answer is C) 1.9
5 0
3 years ago
Read 2 more answers
Suppose a stock had an initial price of $87 per share, paid a dividend of $2.15 per share during the year, and had an ending sha
djyliett [7]

Answer:

Percentage total return is 12.64%

Dividend yield is 2.19% or 2%

Explanation:

Computing the percentage total return by using the formula:

Percentage total return = Gain or loss / Initial price × 100

where

Gain or loss is determined as:

Gain or loss = Ending Share price - Initial price

= $98 - $87

= $11 (it is a gain)

Initial price is $87

Putting the values above:

Percentage total return = $11 / $87 × 100

= 12.64%

Computing the dividend yield by using the formula:

Dividend yield = Annual dividend per share /  Stock's price per share

where

Annual dividend per share is $2.15

Stock's price per share is $98

Putting the values above:

Dividend yield = $2.15 / $98

= 2.19% or 2%

3 0
3 years ago
Georgia, the outside sales rep for a major building supply company, reads a report stating that building permits are down dramat
Rus_ich [418]

Answer:

(B) Advice the production and purchasing department to produce or order smaller quantities of products.

Explanation:

According to my research on basic economics and business owning I can say that the best thing for Georgia to do in this situation in order to help her company become more value driven is to Advice the production and purchasing department to produce or order smaller quantities of products. This is because since product is not selling fast enough they should sell what they already have before producing more, otherwise they will be wasting money on products which will eventually cause them to be overflowing stock. Thus losing money.

I hope this answered your question. If you have any more questions feel free to ask away at Brainly.

6 0
3 years ago
Which one of the following regarding the State Disability Insurance (SDI) program is true?
solmaris [256]

Answer:

B) The State Disability Insurance (SDI) program benefits received for a period of disability are not taxable as income, but benefits received for time off under the Paid Family Leave program are federally taxable as income.

Explanation:

Disability insurance benefits are not reported for tax purposes with one exception. If a person are receiving unemployment insurance benefits,

become unable to work due to a disability, and begin receiving disability insurance benefits, your disability insurance benefits are considered a substitution for your unemployment insurance benefits,  and will then be reported for tax purposes.

If disability insurance benefits are reported, a notice will accompany the first benefit payment sent to you advising  that the benefits are being reported to the Internal Revenue Service.  The employment development department will provide you with a 1099G tax form in January showing the reported amounts paid and forward a copy to the Internal Revenue Service.

Paid family leave benefits are reported for federal purposes but not state tax purposes.

Paid family leave benefits are not taxable or reported to the California State Franchise Tax Board.

4 0
3 years ago
you expect it to pay a dividend of $3 in 1 year, $4.25 in 2 years, and $6.00 in 3 years. You expect to sell the stock for $100 i
Rus_ich [418]

Answer:

$81.52

Explanation:

In this question, we are asked to state the price to pay for a stock at this present day.

To calculate this, we compute it mathematically.

Mathematically, we have;

dividend/(1+required return rate)^year

we then add together

we have

=3/(1.12) + 4.25/(1.12)^2 + 6/(1.12)^3 + 100/(1.12)^3 = 81.52

7 0
3 years ago
Other questions:
  • A stock price is currently $40. Over each of the next two three-month periods it is expected to go up by 10% or down by 10% (mea
    10·1 answer
  • Workers in contributing to the common good is
    7·1 answer
  • Brazilian Juice, a manufacturer of healthy fruit juices in Brazil, sells juice in six different countries including United State
    13·1 answer
  • When does inflation become hyperinflation?
    5·1 answer
  • HR is focused on issues directly related to a person's job and with things that happen at work, as opposed to concerns that may
    10·1 answer
  • What is the best brand of pillar candles?
    12·1 answer
  • Applying macroeconomic knowledge to explain the fiscal policy of countries in 2008
    14·1 answer
  • Sheridan Company had these transactions during the current period. June 12 Issued 84,000 shares of $1 par value common stock for
    15·2 answers
  • Rhiannon, a long-time employee for a healthy pet food company, conducts research about what customers want for their pets. She
    9·1 answer
  • In the second step of the stakeholder impact analysis, managers need to identify and understand stakeholders' ______
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!