Question

Which of the following changes a firm's Beta? Changes in product line. Changes in technology. Changes...

  1. Which of the following changes a firm's Beta?

    Changes in product line.

    Changes in technology.

    Changes in the market.

    All

Which of the following is a non-systematic risk?

Inflation risk

Risk of unexpected strike by the employees of a company.

Interest rate risk

All

If a security's Beta is equal to zero, then its rate of return is equal to the rate of return on the market portfolio.

True

False

Systematic risk can not be eliminated by diversification.

True

False

Flotation Cost is the cost of selling a security and therefore it needs to be taken into account in the cost of capital calculations.

True

False

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