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:

Noncompensatory Modeling

A decision-making approach where a satisfactory level of performance in one attribute does not compensate for a poor performance in another.

Means-end Analysis

A problem-solving strategy that involves identifying the differences between the current situation and the desired goal and steps to reduce these differences.

Working Backward

A problem-solving strategy that involves starting from the desired outcome and working in reverse order to find the solution.

Brainstorming

A method used to generate creative ideas by allowing participants to offer ideas spontaneously and unjudged.