The Beta of a Stock Has Been Estimated as 1

question 47

Multiple Choice

The beta of a stock has been estimated as 1.8 using regression analysis on a sample of historical returns. A commonly-used adjustment technique would provide an adjusted beta of

• A) 1.20.
• B) 1.53.
• C) 1.13.
• D) 1.0.

---

Definitions:

Fallacy

A misleading or incorrect argument or reasoning, especially one based on unsound principles or logic.

Slavery

A system where individuals are owned by others, deprived of personal freedom and forced to perform labor or services without consent.

Minimum Wage

The lowest wage permitted by law or by a special agreement that can be paid to an employee.

Wages

Compensation or earnings paid to an employee by an employer based on the hours worked or the output produced.