Suppose the Following Equation Best Describes the Evolution of β

question 36

Multiple Choice

Suppose the following equation best describes the evolution of β over time:β_t = 0.49 + 0.77β_{t − 1}.If a stock had a β of 0.9 last year, you would forecast the β to be _______ in the coming year.

• A) 0.88
• B) 0.82
• C) 0.31
• D) 1.18

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Definitions:

Rightful Owner

A person or entity that legally possesses property or title.

Constructive Trust

A legal remedy imposed by a court to prevent unjust enrichment by transferring property from the person who unjustly benefits to the rightful owner.

Settlor

The individual who creates a trust by legally transferring assets into it, setting the terms for its management and distribution.

Revoke

To take back or withdraw an offer, right, or privilege.