Suppose the Following Equation Best Describes the Evolution Of $\beta$ Over Time

question 65

Multiple Choice

Suppose the following equation best describes the evolution of $\beta$ over time: $\beta$ _t = 0.4 + 0.6 $\beta$ _{t - 1}.
If a stock had a $\beta$ of 0.9 last year, you would forecast the $\beta$ to be _______ in the coming year.

• A)0.45
• B)0.60
• C)0.70
• D)0.94

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Definitions:

Differentiated Marketing

A marketing strategy in which a company targets several market segments with a unique product or service offering for each.

Product Specialization

A strategy where a business focuses on the production and development of a particular product or range of products, often to achieve higher levels of efficiency and expertise.

Economies of Scale

Cost advantages obtained due to increased production levels, where the cost per unit of production decreases as the volume produced increases.

Economies of Scope

Cost advantages that a business obtains through the diversification of product lines, enabling more efficient use of resources.