Which of the following is NOT considered to be an important choice when estimating beta?
A)The choice of the time horizon to use for estimation
B)The choice of method used to extrapolate beta
C)The choice between weekly and monthly returns
D)The choice of index used as the market portfolio

Question

Quizplus · Accepted Answer

The choice between weekly and monthly returns is not considered an important choice when estimating beta. However, the choice of time horizon, method of extrapolation, and index used as the market portfolio are all important choices when estimating beta. Generally, a longer time horizon is preferred for estimation, the choice of extrapolation method can affect the accuracy of the estimate, and selecting an appropriate market index is crucial for capturing systematic risk.

Which of the Following Is NOT Considered to Be an Important