Stock A has a beta of 1.2 and a standard deviation of returns of 14%. Stock B has a beta of 1.8 and a
standard deviation of returns of 18%. If the risk-free rate of return increases and the market risk
premium remains constant, then
A) the required returns on stocks A and B will both increase by the same amount.
B) the required return on stock B will increase more than the required return on stock A.
C) the required return on stock A will increase more than the required return on stock B.
D) the required returns on stocks A and B will not change.
A
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The margin of safety ratio
a. is computed as actual sales divided by break-even sales. b. indicates what percent decline in sales could be sustained before the company would operate at a loss. c. measures the ratio of fixed costs to variable costs. d. is used to determine the break-even point.
You can only specify a primary key when you first create a table
a. True b. False Indicate whether the statement is true or false