If a firm's beta was calculated as 1.35 in a regression equation,a commonly used adjustment technique would provide an adjusted beta of.SSS
A)less than 1.35.
B)between 0.0 and 1.0.
C)between 1.0 and 1.35.
D)greater than 1.35.
E)zero or less.

Question

Quizplus · Accepted Answer

The commonly used adjustment technique is to adjust the beta towards 1, which is considered the beta of an average stock. Therefore, the adjusted beta would be between 1.0 and 1.35. Option A, B, D, and E are all incorrect based on this logic.

If a Firm's Beta Was Calculated as 1