An industry is likely to have a low beta if the:
A) stream of revenues is stable and less volatile than the market.
B) economy is in a recession.
C) market for its goods is unaffected by the market cycle.
D) Both stream of revenues is stable and less volatile than the market; and economy is in a recession.
E) Both stream of revenues is stable and less volatile than the market; and market for its goods is unaffected by the market cyclE.

Question

Quizplus · Accepted Answer

A low beta indicates that the stock or industry is less volatile than the market. Option E states that the stream of revenues is stable and less volatile than the market, and the market for its goods is unaffected by the market cycle, both of which contribute to a lower beta. A recession (option B) would likely increase the volatility of an industry and its beta, making it less likely to have a low beta.

An Industry Is Likely to Have a Low Beta If