Which of the following will affect the beta value of an individual security?
I. interval of time frequency used for the data sample
II. length of time period used for the data sample
III. particular time period selected for the sampling
IV. choice of index used as the measure of the market
A)I and II only
B)I and III only
C)II and IV only
D)II, III, and IV only
E)I, II, III, and IV

Question

Quizplus · Accepted Answer

All four factors listed (time interval frequency, length of time period, particular time period, and choice of market index) can affect the beta value of an individual security. The beta value measures the sensitivity of the security to changes in the overall market, so changes to any of these factors could impact the correlation between the security and the market. Therefore, all options are correct.

Which of the Following Will Affect the Beta Value of an Individual