Question
In: Finance
Beta measure which of the following? A. total risk B.non-diversifiable, aka market risk C.diversiable, aka firm...
Beta measure which of the following?
A. total risk
B.non-diversifiable, aka market risk
C.diversiable, aka firm specific risk
D.none of the above
Solutions
Expert Solution
B.non-diversifiable, aka market risk
Market risk affects all the securitied in the market. Beta is a
measure of the volatility or systematic risk of a security. It
reflects the tendency of a security's returns to respond to swings
in the market.
jeff jeffy answered 3 years agoRelated Solutions
Which one of the following statements is false? Beta is a measure of risk. "Market risk...
Which one of the following statements is false?
Beta is a measure of risk.
"Market risk premium” and “return on the market” are the same
thing.
CAPM is an acronym for Capital Asset Pricing Model.
A disadvantage of using the dividend growth model to estimate
the cost of equity is that it does not explicitly account for
risk.
You should not use the coupon rate on outstanding debt as the
cost of debt in WACC.
How are total risk, non-diversifiable risk and diversifiable risk related? Why is non-diversifiable risk the only...
How are total risk, non-diversifiable risk and diversifiable
risk related? Why is non-diversifiable risk the only relevant
risk?
Beta is a measure of firm-specific risk. true or false
Beta is a measure of firm-specific risk.
true or false
A. which of the following statements is correct? 1.possible sources of market or none diversifiable risk...
A.
which of the following statements is correct? 1.possible sources of
market or none diversifiable risk include inflation and commodity
price changes, changes in currency exchange rates, and fluctuations
in interest rates
2.the practice of a diversification can effectively reduce and
investors company-specific risk
3. non-systematic risk reflects the risk that remains after an
investor has diversified his or her portfolio
B
the phenomena and behavior discussed above are based on the
assumption that the majority of investors are risk-averse....
which of the following is NOT a key component of the CAPM? a. beta b. diversifiable...
which of the following is NOT a key component of the
CAPM?
a. beta
b. diversifiable risk
c. the risk-free rate
d. the market risk premium
We use Beta as a measurement of investment risk because ______. A. Beta measures the diversifiable...
We use Beta as a measurement of investment risk because
______.
A.
Beta measures the diversifiable risk that investors care about
the most
B.
Standard deviation is a less accurate measure of riskiness than
beta
C.
Beta measures the non-diversifiable risk that investors cannot
avoid
D.
Beta measures the entire riskiness of the investment
We use Beta as a measurement of investment risk because ______. A. Beta measures the diversifiable...
We use Beta as a measurement of investment risk because
______.
A. Beta measures the diversifiable risk that investors care
about the most
B. Standard deviation is a less accurate measure of riskiness
than beta
C. Beta measures the non-diversifiable risk that investors
cannot avoid
D. Beta measures the entire riskiness of the investment
There are non-diversifiable risks such as the Beta risk of an asset, project or industry and;...
There are non-diversifiable risks such as the Beta risk of an
asset, project or industry and; diversifiable risks that can be
offset by a higher discount rate to offset them. What do you
think?. Ratios, indices or financial indicators are classified into
several categories and their interpretation and correct reading is
essential in the diagnosis of a company or a corporation. This
implies that its good calculation and use exonerates the financial
analyst from using industry indicators or trying to...
Beta is the measure of market risk. Look at the businesses listed below and see if...
Beta
is
the
measure
of
market
risk.
Look
at
the
businesses
listed
below
and
see
if you
can
identify
one
that
could
very
likely
have
a
relatively
high
total
risk
but
a lowbeta.
Explain
your
reasoning.
Beta is the measure of market risk. Look at the businesses
listed below and see if you can identify one that could very likely
have a relatively high total risk but a low beta. Explain your
reasoning.
a. The manufacturer of diamond-encrusted dog collars....
Explain what is meant by beta. What type of risk does beta measure? What is the market return?
Explain what is meant by beta. What type of risk does beta
measure? What is the market return? How is the interpretation of
beta related to the market return?
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