Firms whose revenues are strongly cyclical and whose operating leverage is high are likely to have:

Name: Firms whose revenues are strongly cyclical and whose operating leverage is high are likely to have:
Brand: Quizplus
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Question

Quizplus · Accepted Answer

Firms with strongly cyclical revenues and high operating leverage are more sensitive to market fluctuations and therefore have a higher degree of systematic risk. This higher degree of risk is reflected in their higher betas, making option B the correct choice.

Firms Whose Revenues Are Strongly Cyclical and Whose Operating Leverage