If a Firm's Beta Was Calculated as 1

question 42

Multiple Choice

If a firm's beta was calculated as 1.3 in a regression equation, a commonly-used adjustment technique would provide an adjusted beta of

• A) less than 1.0 but greater than zero.
• B) between 0.3 and 0.9.
• C) between 1.0 and 1.3.
• D) greater than 1.3.
• E) zero or less.

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Definitions:

Average Total Cost

The total cost of production divided by the total output, or the cost per unit of output on average.

Pharmaceutical Company

A commercial business that researches, develops, makes, and sells pharmaceutical drugs and treatments.

Average Revenue

The total revenue divided by the quantity sold, representing the amount of revenue generated per unit of output sold.

Marginal Revenue

The increase in revenue that results from the sale of one additional unit of a product or service.