1. In which of the following industries would you anticipate its firms to have the highest betas? A. Grocery Stores B. Utilities C. Insurance D. Construction Supplies
2. Which of the following is true? A. A high “payables period” may be interpreted as good or bad. B. A higher “collection period” is generally a good thing. C. All of these answers are correct. D. A higher “inventory days” is generally a good thing.
3. Which of the following is true? A. A stock’s systematic risk can be diversified away by adding it to a portfolio. B. Investors should not be compensated for bearing nondiversifiable risk. C. Beta is a measure of the nonsystematic risk of an asset. D. None of the answers are correct.