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NACVA Exam CVA 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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Shawnda
4 months ago
Woah, negative beta? That's like the Bizarro World of investing. Definitely C, the counterCYCLICAL returns.
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Delmy
2 months ago
User 4: So, C would be the correct answer then.
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Kelvin
3 months ago
User 3: I think it means the returns move in the opposite direction of the market.
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Sommer
3 months ago
User 2: Definitely, it's like the opposite of what you would expect.
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Josue
4 months ago
User 1: Negative beta is rare but interesting.
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Fabiola
4 months ago
So, would that mean option C is the correct answer?
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Gary
4 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
3 months ago
I think it's because the risk-free return would be greater with a negative beta.
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Bettye
3 months ago
I agree, a negative beta would mean the returns are countercyclical to the market index.
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Lourdes
3 months ago
I think it's because the risk-free return would be greater with a negative beta.
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Lourdes
4 months ago
I agree, a negative beta would mean the returns are countercyclical to the market index.
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Josphine
4 months ago
That's right, it indicates countercyclical returns compared to the market index.
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Gerald
4 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
3 months ago
Yes, that's correct. They provide a hedge against market downturns.
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Carman
4 months ago
So, negative beta securities would perform well when the market is down?
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Olga
4 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
4 months ago
I think option C is correct. Negative betas indicate countercyclical returns.
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Cherry
4 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
5 months ago
I think a negative beta means the security moves opposite to the market.
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