An Analyst Estimates the Index Model for a Stock Using $\beta$

question 74

Multiple Choice

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 $\beta$ is 0.5.The risk-free rate of return is 12%.The true $\beta$ of the stock is

• A)0%.
• B)3%.
• C)6%.
• D)9%.

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Definitions:

Crafting Strategy

involves the careful planning and execution of business strategies to navigate competitive markets effectively.

Successful Entrepreneurs

Individuals who initiate, organize, and run businesses, overcoming challenges and risks to achieve profit and growth objectives.

Public Company

A business entity that has traded its securities (e.g., stocks) to the general public on a stock exchange and is subject to regulatory disclosures.

Access

The ability or right to enter, approach, or use; in a business context, it might refer to the ability to use or procure resources or information.