The Beta of Boeing Stock Has Been Estimated as 0

question 48

Multiple Choice

The beta of Boeing stock has been estimated as 0.72 using regression analysis on a sample of historical returns. A commonly-used adjustment technique would provide an adjusted beta of

• A) 1.20.
• B) 1.14.
• C) 0.81.
• D) 0.68.

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Definitions:

Financial Resources

Assets in the form of money or other valuables that individuals or organizations can use to conduct transactions or invest.

NPV

Net Present Value represents the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period of time.

Cost of Capital

The profit rate that an organization must reach in its investment operations to keep its market status and draw financial resources.