The systematic response coefficient for productivity, $\beta$_P, would produce an unexpected change in any security return of ________ if the expected rate of productivity was 1.5% and the actual rate was 2.25%. A) 0.75($\beta$_P)% B) -0.75($\beta$_P)% C) 2.25($\beta$_P)% D) -2.25%

Question

Quizplus · Accepted Answer

The unexpected change in security return due to productivity would be calculated based on the difference between the actual rate of productivity and the expected rate. Here, the actual rate is 2.25% and the expected rate is 1.5%, so the unexpected change is (2.25% - 1.5%) = 0.75%. This change is then multiplied by the systematic response coefficient for productivity, hence the correct answer is 0.75 times the coefficient.

The Systematic Response Coefficient for Productivity β\betaβ P, Would Produce an Unexpected Change in Any Security Return

The Systematic Response Coefficient for Productivity $\beta$ _P, Would Produce an Unexpected Change in Any Security Return