menu
Sign up

Suppose the Following Equation Best Describes the Evolution of β

Question 40
Multiple Choice

Suppose the following equation best describes the evolution of β over time: βt = 0.31 + 0.82βt - 1. If a stock had a β of 0.88 last year, you would forecast the β to be _______ in the coming year. A) 0.88 B) 0.82 C) 0.31 D) 1.03

Related questions
Q 41
Suppose the following equation best describes the evolution of β over time: t = 0.18 + 0.63βt - 1. If a stock had a β of 1.09 last year, you would forecast the β to be _______ in the coming year. A) 0.87 B) 0.18 C) 0.63 D) 0.81
Q 42
An analyst estimates the index model for a stock using regression analysis involving total returns. The estimated intercept in the regression equation is 6% and the β is 0.5. The risk-free rate of return is 12%. The true β of the stock is A) 0%. B) 3%. C) 6%. D) 9%.
Q 43
The index model for stock A has been estimated with the following result: RA = 0.01 + 0.9RM + eA. If σM = 0.25 and R2A = 0.25, the standard deviation of return of stock A is A) 0.2025. B) 0.2500. C) 0.4500. D) 0.8100.
logo
© 2020 QuizPlus. All Right Reserved