Equity position at reduced capital investment

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Reference no: EM131933782

1. The ability to obtain a given equity position at a reduced capital investment, and therefore magnify returns, is known as

A. hedging.

B. straddling.

C. leverage.

D. triple witching.

2. Which of the following best describes the relationship between a stock's beta and the standard deviation of the stock's returns?

A. The relationship depends on the correlation between the stock's returns and the market's returns.

B. The higher the standard deviation, the lower the beta.

C. The higher the standard deviation, the higher the beta.

D. Standard deviation and beta are different ways of measuring the same thing.

Reference no: EM131933782

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