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NACVA CVA Exam - Topic 6 Question 125 Discussion

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:
C) The returns of these securities are countercyclical to the returns of the board investment market index.
A) It is the result of aggressive securities
B) Betas for small and publicly traded companies are often unreliable
D) Risk-free return would be greater

NACVA CVA Exam - Topic 6 Question 125 Discussion

Actual exam question for NACVA's CVA exam
Question #: 125
Topic #: 6
[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: C

by Dion at May 13, 2026, 07:58 AM

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Claudia
4 days ago
Agreed! C makes sense. Countercyclical returns are interesting.
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Truman
9 days ago
I think C is the best choice. Negative beta means it moves opposite to the market.
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Mohammad
14 days ago
I think the risk-free return wouldn't be greater with negative beta.
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Jennie
19 days ago
Betas for small companies can be unreliable, that's true.
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Jacob
24 days ago
Wait, how can a security have a negative beta? Sounds odd.
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Fidelia
30 days ago
Totally agree, it's rare but interesting!
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Anjelica
1 month ago
Negative beta means countercyclical returns.
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Layla
1 month ago
I think the risk-free return wouldn't be greater with negative beta.
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Kindra
2 months ago
Betas for small companies can be unreliable, that's true.
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Belen
2 months ago
Wait, how can a security have a negative beta? Sounds odd.
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Shawna
2 months ago
Totally agree, it's rare but interesting!
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Solange
2 months ago
Negative beta means countercyclical returns.
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Pearly
2 months ago
I vaguely recall that negative beta indicates a security that does well when the market does poorly, so I’m leaning towards C as well.
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Shawn
2 months ago
We practiced a question like this before, and I feel like it had something to do with countercyclical returns. Could it be C?
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Pearly
3 months ago
I’m not entirely sure, but I think negative beta means the security moves in the opposite direction of the market. Maybe it’s option C?
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Benedict
4 months ago
I remember discussing negative beta in class, and I think it relates to how some assets perform when the market is down.
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