Which of the following industries typically has a Beta less than 1?

• A. Wireless Networking
• B. Consumer Staples
• C. Biotechnology
• D. E-Commerce

Answer: (B)

The correct response pertains to the Consumer Staples industry, which includes companies that produce essential goods such as food, beverages, household items, and personal care products. This industry generally exhibits a Beta of less than 1 because the demand for these products remains relatively stable regardless of economic fluctuations. In times of economic downturns, consumers still prioritize spending on essential items, leading to less volatility in the performance of companies within this sector.

In contrast, industries like Wireless Networking, Biotechnology, and E-Commerce are likely to experience more significant fluctuations in their stock prices, leading to a Beta greater than 1. These sectors are often more sensitive to changes in economic conditions, technological advancements, and consumer behavior, resulting in higher levels of market risk. Thus, the stability and necessity of the Consumer Staples sector make it a lower-risk investment with a Beta typically below 1.