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    Question

    Assets with a beta of 0.95 (in financial terminology)

    will be considered as:
    A Aggressive asset Correct Answer Incorrect Answer
    B Naive asset Correct Answer Incorrect Answer
    C Capital asset Correct Answer Incorrect Answer
    D Defensive asset Correct Answer Incorrect Answer

    Solution

    Assets with a beta of 0.95 in financial terminology will be considered as: Defensive asset In financial terms, beta measures the sensitivity of an asset's returns to the overall market movements. A beta of less than 1, such as 0.95, indicates that the asset is less volatile than the overall market. It means that the asset tends to move less than the market in both upward and downward directions. Such assets are considered defensive because they have a lower level of risk and tend to provide more stable returns, especially during market downturns. Defensive assets are often preferred by investors who prioritize capital preservation and are willing to accept lower potential returns in exchange for reduced volatility and risk.

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