Which of the following statements is CORRECT?
A. If you found a stock with a zero historical beta and held it as the only stock in your portfolio, you would by definition have a riskless portfolio.
B. The beta coefficient of a stock is normally found by regressing past returns on a stock against past market returns. One could also construct a scatter diagram of returns on the stock versus those on the market, estimate the slope of the line of best fit, and use it as beta. However, this historical beta may differ from the beta that exists in the future.
C. The beta of a portfolio of stocks is always larger than the betas of any of the individual stocks.
D. It is theoretically possible for a stock to have a beta of 1.0. If a stock did have a beta of 1.0, then, at least in theory, its required rate of return would be equal to the risk-free (default-free) rate of return, rRF.
E. The beta of a portfolio of stocks is always smaller than the betas of any of the individual stocks.
Answer: B
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Which of the following is a factual misstatement?
A. A projected misstatement resulting from errors found during sampling. B. A management estimate that is outside the range of reasonable outcomes determined by the auditor. C. A fixed asset being recorded at the incorrect cost. D. Difference in judgment between the auditor and management.
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Indicate whether the statement is true or false
Electronic media are sometimes referred to as
A) legacy media. B) direct media. C) indirect media. D) non-media. E) new media.
In order to prove that underutilization exists, it must be shown:
a. by the four-fifths rule, that women or persons of color are disproportionately absent from a position b. that women or persons of color are underrepresented in the employer's workforce relative to their availability in the relevant labor market c. that intentional discrimination is the reason that women and persons of color are not adequately represented in the employer's workforce d. all of the above e. none of the above