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NACVA CVA Exam - Topic 5 Question 77 Discussion

Actual exam question for NACVA's CVA exam
Question #: 77
Topic #: 5
[All CVA Questions]

It is possible (although not very common) for a security to have a negative beta (i.e. a beta less than zero). Such a beta would indicate that:

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Suggested Answer: D

by Merlyn at Dec 08, 2023, 10:53 PM

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Ashley
4 months ago
I think aggressive securities are more likely to have positive betas.
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Jacki
4 months ago
Small companies can have unreliable betas, true!
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Loise
4 months ago
Wait, how can a security have negative beta? Sounds odd.
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Wilbert
4 months ago
Totally agree, it's rare but interesting.
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Michell
4 months ago
Negative beta means countercyclical returns!
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Tashia
5 months ago
I thought negative beta was more about the risk profile of the security, but I can't remember if that relates to option A or D. I’m a bit confused.
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Staci
5 months ago
I practiced a question similar to this, and I recall that negative beta suggests the security performs well when the market is down. So, option C sounds right to me.
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Melda
5 months ago
I’m not entirely sure, but I feel like negative beta indicates some kind of countercyclical behavior. I think that aligns with option C too.
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Micaela
5 months ago
I remember discussing negative beta in class, and I think it means the security moves opposite to the market. So, maybe it’s related to option C?
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Ocie
5 months ago
I'm not totally sure about this one. I know negative beta is rare, but I can't quite recall what it specifically indicates. I'll have to review my notes and try to reason through the options.
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Oneida
5 months ago
Okay, I remember learning about this in class. A negative beta indicates the security's returns are inversely correlated with the market. So C seems like the best answer here.
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Sylvia
5 months ago
Hmm, I'm a bit confused on this one. I know negative beta means the security moves counter to the market, but I'm not sure if that's the same as being "countercyclical." I'll have to think this through carefully.
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Bobbye
5 months ago
This question seems straightforward, I think the answer is C. Negative beta means the security's returns move in the opposite direction of the overall market.
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Karon
5 months ago
I'm feeling pretty confident about this one. The prerequisites for remote logging seem straightforward, and I think I can identify the two correct options without too much trouble.
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Casie
5 months ago
This question seems straightforward - it's asking about the key considerations for designing a customer support contact center. I think I'll focus on the options that mention specific contact center technologies and metrics.
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Shasta
5 months ago
I remember learning about this in class. I think the answer is the shared secret that's configured on both the Cisco ISE and the network access device.
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Craig
6 months ago
Okay, I think I've got this. I'll start by calculating the net profit after interest and taxes, then use the P/E multiples to determine the equity value. As long as I'm careful with my calculations, I should be able to get the right answer.
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Shawnda
11 months ago
Woah, negative beta? That's like the Bizarro World of investing. Definitely C, the counterCYCLICAL returns.
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Delmy
9 months ago
User 4: So, C would be the correct answer then.
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Kelvin
10 months ago
User 3: I think it means the returns move in the opposite direction of the market.
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Sommer
10 months ago
User 2: Definitely, it's like the opposite of what you would expect.
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Josue
10 months ago
User 1: Negative beta is rare but interesting.
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Fabiola
11 months ago
So, would that mean option C is the correct answer?
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Gary
11 months ago
Ha! Imagine a security with a negative beta. That would be like investing in a perpetual motion machine. Gotta go with C on this one.
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Bettye
10 months ago
I think it's because the risk-free return would be greater with a negative beta.
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Bettye
10 months ago
I agree, a negative beta would mean the returns are countercyclical to the market index.
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Lourdes
10 months ago
I think it's because the risk-free return would be greater with a negative beta.
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Lourdes
10 months ago
I agree, a negative beta would mean the returns are countercyclical to the market index.
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Josphine
11 months ago
That's right, it indicates countercyclical returns compared to the market index.
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Gerald
11 months ago
I'm not sure about the specifics, but I know that negative betas are rare. Probably option C is the best choice here.
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Gabriele
10 months ago
Yes, that's correct. They provide a hedge against market downturns.
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Carman
10 months ago
So, negative beta securities would perform well when the market is down?
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Olga
10 months ago
Agreed, negative betas are rare but they do exist. It means the security moves opposite to the market.
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Svetlana
11 months ago
I think option C is correct. Negative betas indicate countercyclical returns.
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Cherry
11 months ago
Option C seems to be the correct answer. A negative beta indicates that the security's returns move in the opposite direction of the overall market.
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Laquita
11 months ago
I think a negative beta means the security moves opposite to the market.
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