What would NOT be true about a GNP beta?
A)If a equity's GNP beta = 1.5, the equity will experience a 1.5% increase for every 1% surprise
Increase in GNP.
B)If a equity's GNP beta = -1.5, the equity will experience a 1.5% decrease for every 1%
Surprise increase in GNP.
C)It is a measure of risk.
D)It measures the impact of systematic risk associated with GNP.
E)None of the above.

Question

Quizplus · Accepted Answer

GNP beta is indeed a measure of how much an equity's performance is expected to change with a change in Gross National Product (GNP). It can be positive or negative, indicating the direction of the equity's response to GNP changes, and it measures the systematic risk associated with GNP changes. Therefore, all the statements A, B, C, and D correctly describe aspects of GNP beta, making E (None of the above) the correct choice as it implies that all other statements are true.

What Would NOT Be True About a GNP Beta