Beta is commonly used as a relative measure of risk. It measures:

Standard deviation of a stock’s price.
The expected total returns of a diversified portfolio.
The unsystematic risk component of an investment.
The risk of a security or portfolio relative to the overall market.

A prudent investor:

Does not have to consider the tax effect of long-term gains.
Evaluates his/her investments on an after-tax basis.
Studiously avoids income-shifting among funds.
Knows that a drop in the dividend payout signals a stronger firm.

Stocks whose returns are tied closely to the overall national economy are typically called:

Blue Chip stocks.
Defensive stocks.
Speculative stocks.
Cyclical stocks.

Mortgage payments:

Can be completely deducted from income for tax purposes.
Vary from month to month on a fixed rate loan.
Represent high principal payments early in the term of the loan.
Are typically tax deductible to the extent that they represent payment of interest.

The P/E ratio:

Is the same for all firms in a given industry.
Does not change over time.
Is typically higher for firms whose earnings are expected to grow rapidly.
Is the same as the dividend yield.

The January Effect:

Is the influence on the market of the mutual funds’ performance reported in December.
Is another name for the Superbowl anomaly believed to affect stock prices.
Is the result of several studies regarding inexplicably higher returns during January.
Supports the predictabilityof cyclical prices determined by chaos theory.
(Portfolio Construction, Management and Protection by Robert A. Strong, p. 182.)

Buying on margin::

Precludes the advantage of using leverage.
Is not affected by limits on borrowing established by ERISA.
Minimizes losses if the price of a security declines.
Is possible by borrowing from a broker.

The term generally used to describe the market in which prices fully reflect all available information is:

The greater fool hypothesis.
Random walk hypothesis.
The size-effect hypothesis.
Efficient markets hypothesis.