This topic contains a solution. Click here to go to the answer

Author Question: Which of the following statements is correct? (Read 13 times)

hannahmadyronde

  • Full Member
  • ***
  • Posts: 134
Which of the following statements is correct?

GGG Inc. is in the business of selling gold. GGG’s revenues, profits, and stock price tend to rise during recessions. This suggests that GGG Inc.’s beta should be quite high, say 3.0, because it does so much better than most other companies when the economy is weak.


You think that investor sentiment is about to change, and investors are about to become more risk seeking. This suggests that you should rebalance your portfolio to include more low-beta stocks.


Suppose you are managing a stock portfolio, and you have information that leads you to believe the stock market is likely to be very weak in the immediate future. That is, you are convinced that the market is about tofallsharply. You shouldbuyhigh-beta stocks and sell your low-beta stocks in order to take advantage of the expected market move.


Suppose the returns on two stocks are negatively correlated. One has a beta of 1.5 as determined in a regression analysis using data for the past 10 years, while the other has a beta of –0.7. The returns on the stock with the negative beta will be negatively correlated with returns on most other stocks in the market during that 10-year period.



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by hannahmadyronde on Aug 7, 2023

avelasquez

  • Full Member
  • ***
  • Posts: 168
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 39% of students answer this correctly




hannahmadyronde

  • Member
  • Posts: 134
Reply 2 on: Aug 7, 2023
Great answer, keep it coming :)


frankwu0507

  • Member
  • Posts: 322
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

Did you know?

On average, the stomach produces 2 L of hydrochloric acid per day.

Did you know?

Cocaine was isolated in 1860 and first used as a local anesthetic in 1884. Its first clinical use was by Sigmund Freud to wean a patient from morphine addiction. The fictional character Sherlock Holmes was supposed to be addicted to cocaine by injection.

Did you know?

Fatal fungal infections may be able to resist newer antifungal drugs. Globally, fungal infections are often fatal due to the lack of access to multiple antifungals, which may be required to be utilized in combination. Single antifungals may not be enough to stop a fungal infection from causing the death of a patient.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

The familiar sounds of your heart are made by the heart's valves as they open and close.

For a complete list of videos, visit our video library