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 A and B.
E)Both A and C.

Question

Quizplus · Accepted Answer

An industry is likely to have a low beta if its stream of revenues is stable and less volatile than the market (choice A) and the market for its goods is unaffected by the market cycle (choice C). This means that the industry is less sensitive to changes in the overall market and economic conditions, leading to a lower beta. Choice B (economy in a recession) may affect the industry negatively, but it is not directly related to beta.

An Industry Is Likely to Have a Low Beta If